Tag Archives: Best GBP/AUD exchange rates

Is the Australian Dollar overvalued? (Daniel Johnson)

Is there an Interest Rate hike on the cards down under?

The Australian Dollar is considered by some to be overvalued at present with the market factoring future interest rate hikes by the Reserve Bank of Australia (RBA), possibly prematurely.

I am of the opinion a raise in interest rates is not a wise move. Australia relies heavily on China purchasing it’s raw materials. A sharp increase in Australian Dollar value will obviously cause raw materials to become more expensive and could cause China to look elsewhere for it’s goods. Philip Lowe the governor of the RBA may resort to jawboning  in an attempt to talk down the value of the currency as apposed to changing monetary policy.

Sterling Woes continue

Sterling is having trouble at present, sitting at 1.63 on GBP/AUD. In order for the pound to make a significant rally we need a stable government and our stance on Brexit needs to be made clear. Politicians with their own agenda caused this situation now it is time for them to solve it. Fifteen conservative MPs recently put forward a vote of no confidence in Theresa May’s position. This does little to help the value of the pound and we are still a long way from clarity on how Brexit will pan out. This amount of uncertainty gives little hope of Sterling strength.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

 

GBP/AUD Forecast Difficult to Judge (Ben Fletcher)

Sterling dropped today after inflation defied expectations and held at the previous level of 2.6%. There was hopes that inflation may rise up to 2.7% however it didn’t happen and the markets responded with Sterling losing a cent against the Australian Dollar. Whilst Sterling has dropped today, in my opinion it didn’t quite go as far as I thought it might. This is due to some of the concerns with the Australian economy which does suggests the Aussie strength is dwindling.

The number of new builds expected in the next few years in Australia looks set to fall which has an effect on the price of housing and the amount of jobs across the country. There is low inflation levels in Australia and despite the Reserve Bank of Australia suggesting they may increase interest rates to 3.5% in the next few years, they wont before inflation rises. This suggests that whilst the GBP/AUD is currently sitting around the mid 1.60’s if good news for Sterling becomes apparent the rate could rise sharply to 1.70.

Unemployment Tomorrow

In the short term there will be Unemployment Data in the early hours of Thursday morning which is expected to show July’s rate has stayed the same as June, however any deviation from this could have a positive or negative effect on rate depending on the direction. Currently with Sterling struggling and on a negative streak I do think there is more chance of the rate falling than going up.

If you do have a question with regards to my forecast or have a different question please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me Ben Fletcher at brf@currencies.co.uk

 

Aussie slightly lower on RBA comments, where next for GBPAUD exchange rates?

The Australian dollar is a little lower this morning as the Reserve Bank of Australia Governor Philip Lowe reiterated that Unemployment was a key factor in any decision to raise interest rates and that for now rates would ‘remain steady’ at 1.5%. The raising and lowering of interest rates is a huge factor driving exchange rates and these comments alongside global events have seen the Aussie a little softer. If you are buying or selling Australian dollars then making some plans around future trends is key to securing the best rates.

Global events are always something to bear in mind with the Australian dollar but more so at present. With the Australian dollar benefiting and suffering as global sentiments on markets rise and fall the latest developments with North Korea and the US dollar are key. Essentially the US dollar is rising because investors are concerned about the prospect of a nuclear war. As the Australian dollar is used by investors because of its high yield (higher interest rates) in times of uncertainty likes this investors will pull their funds and look to invest in ‘safer’ shores, eg the US dollar.

At present this is not overly pronounced, we are only talking a couple of cents off the more recent levels. However any deterioration in the North Korean situation could easily the AUD lose value sharply. There is some important US economic data due at 13.30 UK time today which might lead to some swings on USD/AUD which would in turn influence GBPAUD exchange rates.

All in all I expect the pound to continue to struggle but in the absence of any new fresh bad news and a slightly more dovish RBA, we could see GBPAUD gently drift higher. Next week’s UK Inflation data, Retail Sales, Unemployment and then Australia’s Unemployment data could all be market movers. If you have a transfer now or in 6 months, making some plans around up coming events is key to getting the most for your money.

Whether on amounts of 10,000 GBP or multi-millions, if you have a transfer we can secure preferential commercial rates of exchange and offer practical assistance with the timing of when to lock in a rate.

Thank you for reading and for more information please contact me Jonathan Watson by emailing jmw@currencies.co.uk.

Governor of Australian Central Bank Speech (Ben Fletcher)

In the early hours of tomorrow morning Philip Lowe who is the Governor of the Bank of Australia will speak providing his latest thoughts on the Australian economy. The RBA recently announced they plan to increase interest rates upto 3.5% over the next few years, which would be a 2% increase.

The speech will provide the thoughts of the Governor and could provide an indication as to when the first hike may be. Inflation is low in Australia and its unlikely until that starts to rise there will be little movement. In my opinion should there be a interest rate hike in the near future in Australia the GBP/EUR rate could start to move towards the 1.60 level if not lower. Sterling is massively struggling with little sign of strength and a Aussie hike would only add further momentum.

There should also be a focus on what the US do over the next few months as a period of uncertainty does not appear to be far away. The US interest rate hikes had started to help the GBP/AUD rate to rise as investors moved funds from Australia to a more secure US Dollar. However if the US for example were to go to war with North Korea, the currency may start to be weaker as investors look for certainty. Australia is one of the only high interest rate economies in the leading markets and could receive even more investment. In short I can see a lot more chance of 1.60 than 1.70 on the GBP/AUD.

If you do have a question with regards to currency markets I am well positioned to be of assistance to you. Please feel free to send me a brief email outlining what you’re looking to do and I will be happy to discuss with you. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me at brf@currencies.co.uk

Could Sterling face further losses against the Australian Dollar? (Daniel Johnson)

Inflation a growing concern for the UK

The pound continues to weaken against the Australian dollar. The latest UK interest rate decision did the pound no favours. Interest rates closely linked to inflation. Inflation is  a major concern for the UK at present and at one point threatening to breach 3%. We have now seen a a drop to 2.6% and many believe this is a negative for the economy. I do not share this view, inflation is only beneficial if average wage growth is close to being in sync, it is currently some way behind inflation at 1.8%. If consumers are not prepared to pay over inflated prices for their goods and services this is when growth dwindles and there is the potential for a recession.

Their have been rumours circulating the Bank of England (BOE) could hike interest rates should inflation rise above 3%, so the fall to 2.6% was seen as negative to investors and the pound fell in value as a result. The previous monetary policy committee (MPC)  vote came in at 5-3, with three members in favour of a hike. Kristin Ford has left the MPC however, and has been replaced by Silvana Tenreyo who voted to hold rates. The vote now at 6-2 did little to help Sterling against the Euro.

RBA fear the strong Aussie could damage exports

Down under the strength of the Australian dollar is a concern due to the heavy reliance on trade partners buying Australian raw materials. Reserve Bank of Australia (RBA) governor Philip Lowe will know doubt attempt to jaw bone and talk down the value of the Aussie rather than making a  more drastic change to moneatry policy. I doubt jawboning will have the desired impact.

Hans Redeker from Morgan Stanley recently stated “We expect the AUD to continue to move higher in the short-term as yield-seeking behavior continues,”

The high interest rates  offered in Australia are currently very attractive to the investor, especially considering the weaning of the US dollar of late.

In order for the pound  to rally we need a stable government and the stance on Brexit to be made clear. A rise in inflation could force the BOE’s hand on a rate hike, but this it is not a healthy move for the economy and a long shot if you are hoping for this to bolster Sterling against the Aussie.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

A warning from the RBA

The Australian dollar has been the fourth best performing currency out of the top 10 most traded currencies and is 10.2% stonger on average against all of the major currencies since that start of the year. However Governor of the Reserve Bank of Australia announced last week that he believes the Australian dollar is overvalued and it’s only a matter of time until this starts to have a negative impact on the Australian economy. The Governor beleieves  GDP growth, inflation could start to fall and jobs might be at risk.

Friday morning the Reserve Bank of Australia released their latest monetary policy statement and the central bank reacted to the overvalued Australian dollar by cutting growth forecasts up until the end of the year by 0.5%. However the Reserve Bank of Australia announced that they are optimistic that economic growth would recover over the next 12 months as long as the currency did not continue to strengthen further.

For clients that are selling Australian dollars to buy pounds, I don’t believe the RBA are in the position to cut interest rates in a bid to devalue the Australian dollar however I expect at any opportunity the Governor of the RBA will talk down the currency in a bid to devalue it, a common practice known as jawboning. As exchange rates have improved 10 cents since the start of June and with such an uncertain time ahead this spike in the market may be worth taking advantage of.

If you are trading GBPAUD this week, month or year I would recommend emailing me with the the reason for the transfer (company goods, property purchase) and your timescales and I will response with the options available to you drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **

Interest Rate Decision and Inflation Report set to cause volatility (Daniel Johnson)

Inflation a major concern for the UK Economy

The pound is suffering against the majority of major currencies. The UK economy was in a strong position before the call for a referendum. Cameron used it as a bargaining chip against Brussels which has had drastic results. Politicians with their own agendas has caused this monumental fall for the pound. Boris jumping on the leave train with Farage and then May failing to gain a majority victory in the election.

Inflation is now a key issue,  it hit a peak of 2.9% The most recent figures showed a fall to 2.6% which caused Sterling to weaken. I believe this to be a good thing as the closer inflation is to average wage growth  the stronger the UK economy. Average wage growth currently sits at 1.8% some way for current inflation levels. If there is a large gap between inflation and average wage growth people may stop purchasing goods and services that are now over valued. If people do begin to tighten the purse strings there is the potential for a recession.

Sterling fell in value following the fall in inflation as the chance of a rate hike became less likely. If inflation had continued to rise there was the possibility the Bank of England would choose to raise interest rates. Investors are less likely to move to the pound due to this, I do not feel monetary policy change is the solution to the UK’s problems. A stable government is essential for Sterling to rally and we also require a firm stance on Brexit talks, although I wouldn’t hold my breath.

Super Thursday could cause big swings on GBP/AUD

Thursday could cause high levels of volatility on GBP/AUD. We have the UK interest rate decision followed by the results of the Monetary Policy Committee vote. The nine members vote to lower rates, keep them on hold or raise rates. If there is a change in how the members vote, expect the markets to react. We also have the eagerly anticipated quarterly inflation report which is sure to cause volatility. Hints toward how monetary policy will be implemented going forward will be given at Mark Carney’s speech following the data releases.

Australian Trade Balance Data could influence GBP/AUD

Down under trade balance figures are released in the early hours on Thursday morning. Australia is heavily reliant on the health of its exports and this has the potential to impact GBP/AUD. The Reserve Bank of Australia (RBA) are concerned with the strength of the Australian Dollar as it is making goods and services more expensive for oversea buyers. Although I would be surprised to see any change in monetary policy short term I would expect jawboning from RBA governor Philip Lowe to try and artificially talk the value of the currency down in coming weeks.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Daniel Johnson) on dcj@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Australian Dollar remains strong, but Aussie Dollar sellers should be wary of the RBA’s attempts to weaken it! (Joseph Wright)

In the last month alone the Aussie Dollar has gained an impressive 4% against the US Dollar, and the currency has also manged to find itself trading at the top end of it’s post-Brexit levels against the Pound.

It has also become clear that the Reserve Bank of Australia is skeptical to make amendments to the current interest rate through fear of affecting the housing market. Property prices are overheating down under, especially in the east-coast and a change could create a dramatic impact so I believe there won’t be a change for a while.

The Pound has been underperforming recently which has accentuated the losses for the GBP to AUD rate, and although I think there’s a chance we could see the RBA attempt to talk down the Aussie Dollar and economy in order to keep the currency from becoming even more overvalued, I would rule out a move back down the lowest levels since the Brexit vote of 1.59.

If you are planning on exchanging Aussie Dollars into Pounds and think the rate could become even further favourable, it may be worth looking into setting up a Limit Order in order to try and trade at a higher rate should it become available. I’ll be happy to discuss this in further detail should you wish to.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Reserve Bank of Australia appear unhappy with ‘overvalued’ Australian Dollar, will they take action? (Joseph Wright)

The Aussie Dollar has not only gained a substantial amount of value against the Pound in recent months, but also against most other major currency pairs.

With the Reserve Bank of Australia (RBA) already suggesting that there will be no further interest rate changes this year, they now have the issue of an overvalued currency which is a negative for an economy like Australia’s due to it being so heavily export driven.

The reason the RBA is unlikely to amend the interest rate is due to fears of a heavy impact on the already overheating housing market, as making mortgages easier to come by would most likely cause even further issues for house prices down under and especially on the East coast.

The Australian Dollar is now this year’s best-performing major currency so those looking to exchange AUD into another currency should bear this in mind.

Moving forward I think there’s a chance that we could see members of the RBA attempt to jawbone the currency as they will be looking to keep Aussie exports competitive.

The Pound is coming under pressure as Brexit negotiations take place this week in Brussels, and I think there is always the chance of a update on these which could move the markets.

If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Will GBPAUD rise or fall in the coming weeks?

The Australian is really benefiting from much improved certainty around the outlook on interest rates. Interest rates are a key factor in determining the relative strength and weakness of a currency and this is of vital importance for the Australian dollar. Viewed by investors as a good currency to hold because of the higher interest rates, the Australian dollar will rise in value if investors believe that interest rate will go up in the future. If you are buying Australian dollars the shorter term outlook is not great, it is likely the Aussie will make further gains. If you have a transfer to make buying or selling Australian dollars this information will be vital to the rate in the future.

The Reserve Bank of Australia confirmed that they could well be looking to raise interest rates in the future which has helped the Australian dollar to rise against the pound. The pound is actually much weaker too since Inflation has been falling in the UK at the latest release, this reduces the chance of an interest rate hike. Clients looking to buy or sell Australian dollars for pounds could see GBPAUD test closer to the 1.60 in the next few weeks but longer term it might well recover. Only two weeks ago we were headed to 1.70 so to be where we are now is a surprise in some respects. Events could quickly change again!

News that might help would be the US dollar strengthening again. The USDAUD rate is of real importance to GBPAUD since as USDAUD is the most heavily traded currency pair, the movements on US dollar to Aussie will ‘weigh’ on GBPAUD rates. So for example lately the US dollar has been weakening, this has helped the Aussie to rise which has affected GBPAUD too.

GBPAUD is on the slide but could quickly make a recovery! Every 1 or 2 cents on a big volume of currency can make a difference of thousands so if you have a transfer to consider and wish to get the best rates and help with the timing of any deal please speak to me Jonathan Watson by eamiling jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from and assisting you.