Tag Archives: Best GBP/AUD exchange rates

Pound to Australian Dollar Forecast – Brexit Limbo does not bode well for the Pound

UK & Brussels at Impasse

Although investor concerns may have been eased following the Brexit extension the Pound still remains fragile and I would be surprised to see any significant gains against the Australian Dollar until we have firm news on Brexit. It seems as though the UK and Brussels are at a complete impasse, Theresa May has put several different alternatives to her deal to the House of Commons all of which have failed to gain a majority and Brussels have stone walled the UK stating it is the current deal or nothing.

European Council President, Donald Tusk sent out a warning to his “British friends” saying “please do not waste this time .” It seems as though another extension will be unlikely.

Brexit remains in Limbo and I would not be surprised to see us in a similar situation come October.

The Australian Dollar has its own problems however, Housing prices remain inflated in high wage growth areas such as Melbourne and Sydney. It mean Australians are being forced to spend their hard earned money on necessities rather than luxury goods and services.

Australia  has a heavy reliance on China purchasing its goods. The US/China trade war is causing a slowdown in Chinese growth which is having a knock on effect to the Australian economy and in turn the Australian Dollar. Iron ore is Australia’s primary export and fluctuations in its price can cause a change in Australian Dollar value, it is worth keeping an eye on if you have a trade involving the Aussie.

Recent news coming from US/China trade talks suggest an end could be in sight. US Treasury Secretary , Steven Mnuchin has stated we could see a conclusion to the trade war in under a month. If this is the case we could see substantial gains for the Aussie.

There are still however key points of contention. The US would like to keep existing tariffs in place in order to keep pressure on China , while Beijing would like them stopped immediately.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.
If you already have a currency provider in place. Drop me an email with what you are being offered and I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 18yrs and FCA registered.
If you would like my help feel free to email me at dcj@currencies.co.uk.

Pound to Australian Dollar: Brexit continues to Dictate GBP/AUD

The Brexit saga continues and now we are looking at an extension. GBP/AUD rates had recently risen to the highest levels since June 2016, breaching 1.88. This can be attributed to positive news surrounding Brexit, rumours were circulating that Brussel’s could make concessions on the Irish border and the chances of a no deal scenario dropped considerably.

PM Theresa May addressed the nation yesterday evening and made a plea to MPs to support her deal ahead of what is likely to be a third and final meaningful vote.

May also confirmed she had written to President of the European Commission, Donald Tusk to request an extension to Article 50. she has requested an extension until 30th June.

She also stated that she would not approve a long term extension to Article 50. This immediately raises the question whether this means she is prepared to step down as Prime minister should her deal be voted down and and then vote for a lengthy extension for talks.

She also said “this House will have to decide how to proceed”, if her deal is rejected for a third time.

If May were to resign you can expect this to hurt Sterling significantly.  GBP/AUD has now dropped into the 1.84s.

 US/China Trade War –  Due to Australia’s heavy reliance on China purchasing its goods and services and slow down in Chinese growth has a kick back on the Australian economy and in turn the Australian Dollar.

The US/China trade war is currently hurting the Australian Dollar and if it were not for Brexit I think Sterling could be making decent gains against the Aussie.

There were rumours the trade war could be resolved by the end of the month, but Trump yesterday threw a spanner in the works saying the following:

“We’re not talking about removing them, we’re talking about leaving them for a substantial period of time,”  “Because we have to make sure that if we do the deal with China that China lives by the deal because they’ve had a lot of problems living by certain deals.”

Brexit will continue to be the key driver on GBP/AUD. I think at this point we are looking at an extension as both parties do not wish to deal with a no deal scenario. I think if an extension is called there will not be any great shakes on the market. If Brussels do give concessions on the Irish border however, expect substantial 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 if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 18yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk.

Will the Australian dollar weaken this week? RBA Meeting Minutes are key

Tomorrow is the latest RBA, Reserve Bank of Australia meeting minutes. Investors are closely monitoring this for any news that we could well see key changes in the outlook for the Australian dollar, as the RBA responds to the change in economic outlook for both the global economy and the domestic Australian economy.

Pressures are mounting on the RBA to be more conscious of a consideration for a more dovish, or soft interest rate policy as investors seek to gauge the likelihood that up ahead interest rate cuts will become much more necessary for the Australian economy. China is Australia’s largest trading partner and the market is of the belief continued economic troubles will see the Australian economy suffer, and therefore need to cut rates ahead.

The raising and lowering of interest rates is a big factor in the currency markets, as investors seek to position themselves in a currency which they believe will ‘yield’ a higher return. For example, the higher an interest rate, the stronger generally a currency will be. It is similar to the way that a higher interest rate will attract investment into a savings account.

Likewise, when an interest rate is cut, or investors believe that it might be up ahead, the currency will lose value. This is because it makes the currency less attractive to hold by those concerned with a stronger investment. Such is the case with the Australian dollar at present, as a lower interest rate prediction makes the currency less attractive to hold by investors.

Moving forward, the RBA and Australian economic data will face tough scrutiny as the market gauges the likelihood of the future cuts in the rate. Clients with a position to buy or sell Australian dollars might benefit from a quick review with our team to ensure they are fully up to date with what lies ahead, and how they might benefit from the volatility.

Thank you for reading and please get in touch if there is anything that you wish for us to run through or discuss, relating to a transfer of Australian dollars.

Jonathan Watson

jmw@currencies.co.uk

GBP/AUD – Where Next? (Daniel Johnson)

Brexit Extension

Since December the Pound has been losing value against the Australian Dollar. Sterling reached its highest level against the Aussie yesterday since the 2016 referendum. This was following the news that a Brexit no deal had been taken off the table until 29th March combined with the news that MPs have now voted to extend Article 50 in order to come up with a mutually acceptable deal between the UK and the EU.

The Australian economy is currently experiencing problems which is proving to be another catalyst for the rise in GBP/AUD. Consumer confidence, business confidence and housing loans data all showed a decline. Australia’s heavy reliance on China purchasing it’s goods and services is hurting the Aussie as Chinese growth, although still impressive has slowed quite considerably since the US/China trade war commenced. It was announced yesterday that China’s industrial output fell to its lowest level in 17 years during the first two months of 2019, unemployment has also been on the rise. There is the potential that Chinese President, Xi JinPing and US President, Donald Trump could come to an agreement at the end of the month and cease tariffs which could boost investor confidence and in turn strengthen AUD.

Will the RBA minutes give an insight into future Monetary Policy?

Although Brexit will continue to be the key driver on GBP/AUD there are plenty of other factors that can have an impact on the currency pair. On Tuesday morning, during the early hours the Reserve Bank of Australia (RBA) will release minutes following the recent interest rate decision where rates were kept on hold at 1.5%. The RBA have already hinted at potential rate cuts and if this is mentioned again we can expect further Australian Dollar weakness.

Next Thursday has the potential to cause market movement with the release of RBA Bulletin and unemployment figures for February. If the data arrives away from expectation expect volatility.

Personally, I think the Aussie could be in for a tough time due to the increasing problems surrounding the economy, I haven’t even touch on the housing price bubble. If it is announced there is a deal on the Irish Border I would expect significant Sterling strength. I feel Pound is currently chronically undervalued. If I was sitting on Aussies I would not be hanging around for improvements considering risk versus reward.

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 18yrs, 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 .

 

 

 

 

 

Could the Australian dollar weaken further?

The Australian dollar has been weaker in the latest few weeks as investors fears over the Trade Wars remain, plus the expectations on the RBA, Reserve Bank of Australia, increase to potentially cut the interest rate in the future. There has been a growing expectation that perhaps the Australian central bank has been under estimating the extent to which they would need to cut interest rates in the future, based on the ever-changing global developments. If you are looking to buy or sell Australian dollars in the coming days and weeks an awareness of all of these options and outcomes is sensible.

The market is looking like it could be in for a rollercoaster ahead for the Australian dollar as a series of events develop overseas and at home to trigger volatility. One of the key aspects of the Trade Wars is that in disrupting global trade, they are putting pressure on the global economy which will ultimately lead to a weaker Australian currency. Australia’s economy is heavily reliant on the global economy performing well which will support strong demand for the export of their raw materials.

Overall, there is a belief that the Australian dollar is destined to lose value over the longer term, this is evidenced by its recent weakness which will only continue should the market continue to be faced with the evidence of a slowing global economy.

There is important economic news ahead for the Australian dollar with key information released this week on Consumer Inflation Expectations and National Australia Bank Business confidence figures. This will all be seen in the light of the ongoing developments with the US and China trade wars which had been more positive, but just lately have seen uncertainties creep back.

If you have an important currency transfer to make, being prepared is key in this market where events can quickly and suddenly change and unfold. If you would like to run through or discuss the market or our services, then please do not hesitate to get in touch to discuss further.

Thank you for reading and please contact me Jonathan on jmw@currencies.co.uk.

RBA expected to keep rates on hold, but could GBP/AUD see further gains this week?

Over the past week we’ve seen the GBP/AUD rate hit the headlines after the rate hit an almost 3-year high. With Brexit now just a few weeks away the Pound has defied many expectations and strengthened across the board of major currency pairs with GBP/AUD hitting 1.8732 at its highest point. At the time of writing the pair remain north of 1.87 on another strong start for the Pound so I wouldn’t be surprised to see the current 52-week high of 1.8732 tested again, if not today perhaps later this week.

Sterling has been climbing since the path for Brexit became clearer, and a number of MP’s have suggested they could support the Prime Ministers Brexit deal when the next vote takes place. The next meaningful vote will take place on the 12th of this month and after Theresa May lost the last key vote on this matter by a record margin I expect all eyes to be watching the Pound and the outcome of the vote on the 12th.

This evening UK time the Reserve Bank of Australia (RBA) will announce their next interest rate decision. No changes are expected from the record low of 1.5% but the comments afterwards from the RBA could impact AUD exchange rates so it’s worth being aware of this release as the last time the RBA made some dovish comments and indicated that there could be further cuts we saw the Aussie Dollar sold off.

I expect political updates from the UK especially regarding Brexit to remain the main drivers of currency fluctuations owing to the Brexit being just a few weeks away now.

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.

Will the Australian dollar weaken further?

The Australian dollar has been weaker as poor economic data and also global concerns weigh on the currency. Investors have been closely monitoring developments with the trade wars, which have seen China and the US go head to head threatening increasing tariffs on each other. There has also been the North Korean – US Summit in Vietnam, which has not proved successful for Trump, thereby putting further pressure on the Australian dollar.

The Australian dollar is a barometer of global trade which has seen the market moving in the favour of any clients looking to buy the Australian dollar, expectations are for a very busy time ahead, as investors seek greater clarity on what lies ahead. Global trade could now be under greater pressure as investors seek to obtain more certainty around the Trade Wars and the possibility of destabilisation in the North Korean peninsula.

The Australian dollar is also suffering from pressures at home, as investors seek to obtain greater clarity over the outlook globally, and the RBA, Reserve Bank of Australia, seek to consider cutting interest rates in order to ease the wheels of their economy, in order to be able to manage any possible downturn.

The slowing economy globally, and increased uncertainty in global markets, has seen the Australian economy weaker as it depends so much on strong global demand for its natural resources which include coal and aluminium and other commodities. The Australian economy has been weakening owing to these global concerns and this is now beginning to weigh on the market, as investors seek other shores and remain unconvinced about what lies ahead.

Clients with a position to buy or sell Australian dollars should be aware of a few volatile sessions ahead, we are in business to help with the planning and execution of any transfers. GBPAUD in particular, could be in for a very volatile month as we await the latest news from the Brexit. Trading levels on GBPAUD could ever surpass 1.90 at the top end of the ranges.

Thank you for reading and please let feel free to contact me if there is anything that you wish to discuss for the future.

Jonathan Watson

jmw@currencies.co.uk

US/China Trade War and Brexit dictate GBP/AUD (Daniel Johnson)

Progress in US/China talks

Due to Australia’s heavy reliance on China purchasing its goods and services any fall in growth from China has an impact on the Australian economy and in turn the Australian Dollar.

The US/China trade war is a huge concern amongst investors, a trade war between the world’s two largest economies has huge implications. The Trump administration wants China to change its economic strategy, something Chinese President,  Xi Jinping will be reluctant to do. The changes that are being asked for would hit the Chinese economy hard and  long term. It may be the case that the Chinese will try and give very small concessions in  bid to lengthen the trade war and out last Trumps reign. A dangerous game considering the US has threatened to increase tariffs to 25% should their terms not be met. 25% is a huge increase and if China retaliate both economies will suffer not to mention the global impact.

At present, trade talks seem to be progressing well.  When asked about how talks were going yesterday in Beijing, US Treasury Secretary , Steven Mnuchin replied “so far so good.”

If it were not for the lack of clarity surrounding Brexit I think Sterling would be making gains against the Aussie. Although, the pound could lose value as negotiations with Brussels intensify I think the likely outcomes are either an 11th hour deal or an extension, both of which could cause significant Sterling strength. Morgan Stanley recently suggested there was less than a 5% chance of a no deal scenario. The market moves on rumour as well as fact so due to a no deal Brexit being largely factored out of the equation at present, if it were to occur expect  a large drop in the pound as this outcome is definitely going against the grain.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavour to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.
If you already have a currency provider in place. Drop me an email with what you are being offered and I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 18yrs and FCA registered.If you would like my help feel free to email me at dcj@currencies.co.uk.

US China Trade War Intensifies (Daniel Johnson)

AUD losing investor confidence

Australia is heavily reliant on China purchasing its goods and services. Any fall in Chinese growth has a knock on effect on the Australian economy and in turn the Australian Dollar.

The US China trade war is a serious concern for investors and it is pushing them away from riskier commodity based currencies such as the Australian Dollar. The US and China are currently in talks and the Trump administration wants China to make fundamental  changes to its current economic strategy.

If China were to make some of the changes requested it would have serious implications on the Chinese economy. Chinese President, Xi Jinping knows this and it may be the case that he will try to make as little concessions as possible in an attempt to outlast Trump’s reign.

It is a risky game considering the US has threatened to increase tariffs by 25% on $200bn worth of goods. The US has said they will implement the tariffs if the two sides fail to make progress by 1st March.

According to a UN trade agency report Asian countries would be the most effected. The implications of such an increase should not be understated. With two super powers trading blows the effect will be wide reaching and will hit the global economy.

The Australian Dollar could be among the hardest hit until we have a resolution, which could be some way off, AUD will remain fragile.

If it were not for the lack of clarity surrounding Brexit I think we could see some decent gains for Sterling against the Aussie, unfortunately the uncertainty over Brexit is outweighing concerns down under and the Pound continues to be anchored at low buoyancy levels. There are alternative options to May’s deal being put forward, but there is still no firm way forward. May’s intention is to gain concessions from Brussels that will be accepted by parliament. She has already attempted to this in December after delaying the initial vote. May was stone walled by Brussels and European Commission President, Jean Claude Junker has continually stated there will be no concessions made. Many still believe a deal may be struck at the 11th hour, but Brussels have stuck to their guns up until this point. The PM is currently in a worse position than in December following the diminishing probability of a no deal scenario (one of her only sources of ammunition) with Morgan Stanley predicted there is less than a 5% chance of a No deal Brexit.

If you are looking to move GBP – AUD short term aim for the 1.83s.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavour to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 18yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

 

 

 

Australian dollar mildy firmer after RBA Meeting!

The Australian dollar has been mildy firmer after the RBA, Reserve Bank of Australia, kept their interest rates on hold overnight. The expectations for the RBA is to have moved their outlook to a slightly more dovish tone but overall they kept up their current viewpoint, which is essentially that they will keep interest rates on hold for now.

The RBA did cite increased global risks, which could lead to a lower economic outlook in the future. This might well prove indicative for future Australian dollar weakness, there is now increased expectations that the longer term future for the Australian currency remains subdued. However, for now, as the RBA are not directly forecasting a rate cut, the market is likely to err on the side of caution.

In other news overnight the latest Australian Retail Sales figures weighed slightly on the market, coming in slightly worse than expected. This could be another sign of what the future might hold and be an indicator that the Australian dollar might in the future be struggling.

Some of the downside risks for the currency include global events such as the Trade Wars with China, and also recession in Italy. With the IMF recently having downgraded global growth, we could see the Australian currency lose value longer term if global confidence does not improve.

I expect the Australian dollar to weaken longer term and think clients looking to sell the currency would be better to move sooner than later, to avoid the risk of any losses. The Australian currency is effectively a barometer of sentiments on global trade and with those sentiments likely to suffer further, it seems likely the currency will fall in the future.

Next week is a series of Australian releases, including Home Loans and also some Chinese data. With Chinese economic news weighing on the economic outlook for the region, clients with Australian dollars to sell might wish to take advantage of the more recent improvements and lock in their gains.

Thank you for reading and please let me know if you have a transfer that we might be able to help out with, or you wish to discuss.

Jonathan Watson

jmw@currencies.co.uk