Tag Archives: best UK 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.

 

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.

Will pressure on Sterling result in further falls for GBP/AUD, even if the RBA doesn’t want a stronger Aussie Dollar? (Joseph Wright)

There has been a lot of talk recently from both economists as well as the Reserve Bank of Australia that the Aussie Dollar is an overvalued currency.

Of all the major currencies the Aussie Dollar is the 4th best performer so far in 2017, and whilst this sounds like a positive thing to many the reality is an overvalued currency isn’t great news for export driven currencies due to the fact that it makes purchasing goods from Aussie more expensive, and therefore negatively impacts the economy.

The issue the RBA have is that cutting interest rates again in order to stem demand for the currency isn’t easy, as the likely market reaction within the property market would be negative. This is why I don’t think there will be a rate cut, as the property market is already overheating and if they make mortgages even more affordable that problem could spiral, especially in the East-cost of the country where property prices are already very high and unaffordable in many cases.

The Pound is coming under increasing pressure due to the Bank of England’s decision not to raise interest rates, and also just yesterday it emerged that the BoE’s forecast for the UK economy in 2017 isn’t going to grow at the rate they had previously expected.

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.

 

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.

Sterling climbs against the Aussie Dollar as the RBA warns of strong currency putting pressure on Australian economy (Joseph Wright)

The Pound to Aussie Dollar exchange rate hit 1.66 in the early hours of this morning, and this was the first time in over 2-weeks that we’ve seen the Pound trade this high.

The headline comments from the Reserve Bank of Australia in the early hours came in the form of a warning, saying that the ‘Aussie’s recent strength has been placing pressure on the Australian economy’ and this resulted in the selling off of AUD.

The RBA appears to be fairly neutral in its outlook for future growth after suggesting that forecasts for the Australian economy remain unchanged (currently at 3% annually).

The fall for the Aussie dollar came after data showed that sentiment within the Manufacturing sector strengthened, along with the positive move of 7% increase in the value of Iron Ore which has given AUD a boost.

It appears that the RBA would prefer a weaker Aussie Dollar and I think that those planning on converting Aussie Dollars into Pounds should consider the gains they’ve seen recently, and whether they think the Aussie can continue to strengthen at its current rate.

This Thursday is likely to be a busy day for Sterling exchange rates as a whole and I expect to see the GBP/AUD rate see volatility. Thursday is being billed as ‘Super Thursday’ and if you would like to discuss why in future detail do feel free to get in touch.

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.

 

Pound to Australian Dollar improves despite IMF downgrade, is this a sign that the Pound is oversold? (Joseph Wright)

I wrote last week about how some analysts as well as members of the Reserve Bank of Australia are becoming concerned that the Aussie Dollar is becoming overvalued and higher than it perhaps should be, and I believe we will continue to hear similar commentary in the upcoming months.

Earlier in the year the Pound to Aussie rate hit the mid 1.70’s whereas the pair are now trading closer to 1.50 than 1.60. Since the Brexit the lowest the pair have fallen to is to a mid-market level of 1.59 so i don’t think we can rule out another move to these low levels as we don’t require the GBP/AUD pair to do something they haven’t in recent history.

In the early hours of this morning the Pound started off on the back foot after the International Monetary Fund (IMF) downgraded both the UK and the US growth forecasts for the rest of this year.

Throughout the day though the Pound has climbed, not just against the Aussie but across the board as the Pound as gained against all major currency pairs today.

Despite this boost I think that we could see the Pound trade at lower levels, especially if the UK inflation rate continues to under-perform and the likelihood of a rate hike from the Bank of England continues to dwindle.

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.

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.

Reserve Bank of Australia Minutes Tomorrow (Ben Fletcher)

In the early hours of tomorrow morning the RBA will reveal the minutes of their latest meeting. Whenever a central bank reveals the committee’s thoughts markets can always get excited. Several countries around the globe have started to raise interest rates and the recent strength for the Australian Dollar over the last 9 months suggest Australia may be the next to hike rates.

China which is one of the key influences on the Australian economy last week released positive date and installed further confidence that things are settled. In my opinion it would not surprise me if there is a downward movement in the GBP/AUD rate tomorrow morning and may present a good time for Aussie Dollar sellers. However come tomorrow afternoon the main influence will be Bank of England Governor Mark Carney. The UK interest rate conundrum continues on and if Carney makes a hint towards a hike expect a major market movement. Tomorrow could see a good morning for the Aussie Dollar reaching a near month high followed by a return to nearly 1.70 on the GBP/AUD rate.

The end of the week may also bring AUD volatility as there will be a release of June’s unemployment figures. If these are positive expect Aussie Dollar strength, however as always anything negative or unexpected can shock the market.

When the markets are this volatile there will always be spikes and drops, making timing a transfer vital to maximise your funds. If you have any questions with my forecast above or would like to simply discuss an upcoming requirement you have please send me an email to brf@currencies.co.uk. I would be happy to share my thoughts with you and I may be able to offer a viable solution to help you complete a trade, as I have several years experience working for a brokerage

Volatility expected on GBP/AUD in the next 24hrs as government announcment expected (Daniel Johnson)

Queens Speech has potential to cause movement on GBP/AUD

Tomorrow we will see the state opening of parliament and the queens speech which had been delayed as the conservatives and the DUP thrash out a deal. The UK is currently in political limbo at present and this has been very detrimental to the pound, if we go by what is taught in economics class you would expect the pound to rally once there is a government in place. It is common knowledge that we will see a conservative-DUP  coalition and the market will have largely factored this into the current GBP/AUD rate.  What I think will have more bearing is what plans the coalition have for the country particularly regarding the brexit strategy. A change from Theresa May’s hard brexit plan could well occur, as the DUP would favour a soft border between Northern Ireland and Ireland, this would mean a move away from May’s plans of border control and a hard brexit. It is important to also note that senior members of the conservatives have threatened to challenge May’s leadership if she changes her plans on  a hard exit. If you have a currency trade to perform involving GBP/AUD you need to be in touch with an experienced broker if you want to take full advantage of short term spikes. There are a number of options to ensure any tempting peaks which emerge are not missed and if you would like me to help, be sure to get in touch in quickly so I am aware of your situation and can assist in maximising your return. My details are at the bottom of the article.

 

RBA Minutes gives an indication of what could influence future Australian Dollar value

The Reserve Bank of Australia (RBA) minutes  take place two weeks after the interest rate decision. They provide an account of policy discussion and also how the committee voted. This can give a real indication of what monetary policy changes can be made in the future and can influence GBP/AUD.

The minutes took place during the early hours of this morning and is was much the same as the previous meeting, interest rates were kept on hold at 1.50%. Housing and employment will be key factors in interest rate judgement as detailed in the minutes.

Data will continue to hit the wire throughout the month regarding these key indicator, affecting the value of the Australian Dollar consistently. Feel free to get in touch if you would like me to keep an eye on these releases for you, I can contact you if an opportunity presents itself.

Should you find our information useful and you would like me to assist with your trade I will be happy to help you personally. If you inform me of the details of your trade I will endeavour to provide a free trading strategy tailored to your situation. We are authorized by the Financial Conduct Authority so you can trade with safety and confidence. Our reputation at Foreign Currency Direct is impeccable, we also offer the most competitive rates of exchange and if you have a current provider I am willing to perform a comparison and I am very confident I can demonstrate a significant saving. I look forward to being of help. I can be contacted at dcj@currencies.co.uk. (Daniel Johnson)