Tag Archives: Brexit

What’s affecting GBP/AUD currently?

There are many variables which can affect the strength of a currency. Factors like politics, the economy and inflation rates are some of the more common ones. Current events like Brexit have heavily impacted the rates of currencies such as the Australian dollar.

Having an understanding on how these world events are having an effect on the rates of varying currencies is in your interest if you have a requirement to buy or sell the currency in question.

Brexit

If you have been keeping up with current events you may know that one of the major ongoing events at the moment is Brexit and the UK’s everlasting departure from the EU. Recently, with the confirmation of a general election occurring in December, the outlook for the AUD has risen with its relationship to the GBP. This is because of a higher chance of the UK leaving the EU with a deal opposed to a potentially catastrophic ‘no deal’ or even the chance of Brexit being scrapped altogether.

In the past couple of days, Boris Johnson, the UK prime minister has issued apologies to his Tory party members for being unable to deliver his ‘do or die’ Brexit plan. Leaving both himself and the UK unsure what is to come next, but for now the outlook looks positive for interlinking currency partnerships with the GBP, especially the AUD.

Ongoing trade wars

Other events have also taken place recently which has seen the AUD rise and encouraged potential buyers of the currency to do so now. Trade wars have been a major contributor. With the Australian economy losing steam amidst the China trade wars, the Reserve Bank of Australia (RBA) have begun to slash interest rates in a bid to prevent an economic slowing because of these trade wars. There are rumours that more cuts to interest could happen in November.

The AUD/GBP interbank exchange rate is currently at one of its highest points and is trading at around 1.87; the rate is starting to steadily pull back after recent rallying. Analysts have voiced their opinions that there is a chance that the upward trend observed between AUD/GBP could continue, and if so, could rise to around 1.92.

The main topics affecting the rising rate are the meetings between the RBA for the AUD and meetings with the Bank of England (BoE) this coming week. Recent highs and the possibility of further gains have seen some investor moving funds into the Australian dollar.

For more Pound and AUD news or if you have a currency requirement you can get in touch with me, James Lovick, directly at jll@currencies.co.uk, or call +44 (0) 1494 360 899 to discuss these factors in more detail.

How a UK general election could affect the Pound to Australian Dollar forecast

From recent reports, we know that the UK will be holding a general election on the 12th December 2019, should the House of Lords pass the bill backed by lawmakers in the House of Commons this Tuesday.

The UK prime minister Boris Johnson is taking a huge risk in hoping to achieve a parliamentary majority, with the promise of delivering Brexit. However, if this does not occur, there is a chance the UK could be back to square one with not one party winning a clear majority.

Current state of the pound to Australian dollar standings

The volatility of the market concerning the GBP is ensuring that forecasters remain second guessing themselves. With the outcome hanging in the balance and resting in the hands of the British public once more, the forecast for the strength of the British Pound and its relationship with other currencies like the Australian Dollar is likely to continue up until the election date in December.

With the likelihood of a general election being called for the UK in December, shifts have been observed in currencies. The election could reduce the chance of a ‘no deal’ Brexit taking place. In doing so, GBP softened against an outperforming AUD this Tuesday, but forecasters are expecting a post-referendum high in the coming weeks.

What the election means for the future forecasting of the GBP/AUD relationship

The GBP and AUD pairing is likely to be ever-changing throughout the deliberations in Westminster. Reports are suggesting that despite currencies typically not favouring elections, this one could be different. This is because the election could offer the chance for some much-needed clarity on the direction of the UK’s future economic regime. There is also a chance that investors may be keeping close watch as the possibility of Brexit being scrapped altogether is not out of the picture.

Experts are predicting that the Pound could well rise as far as 1.94 against the Australian Dollar up ahead. This would be GBP/AUD rate’s highest point since the referendum back in 2016, this is if Boris Johnson ensures that a ‘no deal’ Brexit does not occur. Reports from Australia have seen the RBA cut rates three time this year to boost Australian growth and inflation.

The AUD is showing promising rises, but analysts are warning that this may be short lived with both domestic and international factors (like Brexit and US-China trade talks) threatening to limit the growing rate. The proceedings from Westminster are likely to be one of the major factors affecting the GBP/AUD so the outcome of December’s proposed election is likely to be an important one.

For more Pound and AUD news or if you have a currency requirement you can get in touch with me, James Lovick, directly at jll@currencies.co.uk, or call +44 (0) 1494 360 899 to discuss these factors in more detail.

GBP/AUD drops from its annual highs as Brexit momentum slows

The Pound has eased off from the highs we saw earlier this month as the next steps for Brexit have become less clear.

Sterling has risen dramatically this month as UK Prime Minister Boris Johnson has agreed a new deal with the EU that so far has been received well, although his hopes of pushing the deal through before the end of the month as he had hoped are fading.

When will the UK have a general election?

Parliament has voted in favour of agreeing a new timeline for the UK’s departure rather than rushing to implement the deal, and now we’re awaiting an update from the EU as to whether or not they will agree another Brexit extension and also for how long. The general consensus is for an extension up until the 31st of January and the chances of a general election have also increased now which is something Boris Johnson is pushing for, whereas Labour leader Jeremy Corbyn has been less willing to agree to.

At the time of writing the GBP/AUD pair are trading in the 1.88’s and the highest point of the year came earlier this month when they hit 1.9093. The gains for the Pound due to the decreased chances of a no-deal along with the new Brexit Withdrawal Bill have been aided by the falling Aussie Dollar, with the Reserve Bank of Australia opting to cut Australian interest rates to their lowest levels in history.

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 uutlook after Varadkar & Johnson Talks cause Sterling strength

Positive Brexit talks lifts GBP/AUD

Following positive news in Brexit proceedings we have seen gains for Sterling against the Australian Dollar. Boris Johnson spoke with Leo Varadkar for over two hours yesterday and were reported to be detailed and constructive. Varadkar said that the talks were very positive and negotiations could resume.

This is good news ahead of the EU summit on 17th and 18th October. Boris must have an acceptable deal in place by the 19th October in order to avoid either an extension or a no deal scenario. We saw Sterling make advances against the majority of major currencies following the news although whether these advance are justified can be argued.

US China trade war continues to effect AUD

With such little time to find a solution to the Irish border the Pound could remain fragile. The Australian economy is still under threat due to the prolonged trade war between the US and China due to Australia’s heavy reliance on China purchasing it’s exports. Brexit seems to be outweighing these concerns at this point and is one of the key factors affecting GBP/AUD.

During unpredictable times you may wish to be in contact with a currency specialist who can provide the latest currency updates. Foreign Currency Direct PLC has specialised in foreign exchange for over 19yrs and we are authorised as an e-money institution by the FCA. If you already use a provider, I can perform a comparison within minutes, to give you an indication of the potential saving you could make by using Foreign Currency Direct. If you would like my assistance I can be contacted at dcj@currencies.co.uk.

Pound to Australian Dollar Forecast: GBP to AUD exchange rate makes strong gains

Australian unemployment data disappoints the markets

The pound to Australian dollar exchange rate has made strong gains after Australian unemployment data released this morning disappointed the markets. The interbank rates for GBP vs AUD have rallied higher to 1.8375, at the time of writing. The unemployment level down under rose in August to 5.3% from 5.2% the previous month. The last Reserve Bank of Australia minutes hinted at a weaker jobs markets and the concern now in that the numbers may disappoint further going forward. The unemployment data coincide with recent weak Gross Domestic Product data for the second quarter which was recorded as the lowest in the last decade.

Bank of England expected to leave rates on hold

UK retail sales data is released this morning ahead of the Bank of England interest rate decision at 12pm. The Bank of England is not expected to make any changes to the headline interest rate today with Brexit so close by as well as the growing prospect of a general election. Rates are expected to stay on hold at 0.75% with so many external distractions. This is despite UK inflation data released yesterday which fell to its lowest level since 2016 and below the Bank of England target rate. It has also been reported that in the event of a no deal Brexit then interest rates may be cut further in the coming months.

How will the Supreme court ruling affect the GBP to AUD exchange rate?

Brexit meanwhile continues to dictate the travel for sterling exchange rates and today will see the third and final day at the Supreme Court. The courts are hearing whether it was unlawful for Boris Johnson to prorogue parliament. An outcome may come as soon as today although the top judges may want the time over the weekend to come to a unanimous decision. Expect volatility based on the outcome especially if the courts did rule against the government. Expect high volatility for the GBP AUD pair and those clients looking to buy or sell Australian dollars would be wise to plan around all the latest developments.

The EU have also given the UK until the end of September to produce written proposals which could see a shift on where Brexit is heading. To date the Prime Minister has reportedly progressed discussions on the controversial backstop by providing alternatives where checks could be done away from the border. However the EU are keen to see these proposals in writing, something the British side is reluctant to do at this stage.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me James at jll@currencies.co.uk

Is QE on the cards from the Reserve Bank of Australia? (Daniel Johnson)

Pound to Australian Dollar Forecast

The Australian economy has suffered of late with a drop in house prices, increased unemployment and a cut in interest rates to a record low of 1%. Australia is heavily reliant on China purchasing its goods and due to this the US/China trade war is having an impact on the Australian Dollar.

China is in the midst of its slowest economic expansion in thirty years and the Chinese Yuan continues to drop in value posting a fresh 11 year low on Monday. Dr Adam Triggs of the Australian National University’s Asian Bureau of Economic Research points to the Trade War as a huge contributor to the Australian economy’s recent stalling “We trade a lot more than most countries and we rely on foreign money for investment, so when you start to get international turbulence we feel that a lot more than others.”

The  concerns around the Chinese economy and its drop in demand for Australian goods and services has meant that the Pound has managed to regain a footing above 1.80 on interbank despite the Brexit chaos Boris Johnson has been inflicting since taking over as Prime Minister.

As Australians interest rates follow the global trend of cuts there has been much speculation over the Reserve Bank of Australia’s, (RBA) next step in efforts to stimulate economy. For some time Westpac has led calls for the Reserve Bank to consider a further cut to 0.5% while Deutsche Bank says it expects the cash rate to drop to just 0.25% by as early as the end of this year. However, Philip Lowe the governor of the RBA has ignited a debate over whether Quantitative Easing (QE) would be the next step for the RBA. QE is essentially pumping money into an economy in order to stimulate growth. It is a controversial monetary policy as historically results have been mixed, it is far from a proven method and can also put the country in question in huge levels of debt. In the face of an economic crisis when he commented “we are prepared to do unconventional things if the economy warranted it” when questioned in Parliament.

During unpredictable times you may wish to be in contact with a currency specialist who can provide the latest currency updates. Foreign Currency Direct PLC has specialised in foreign exchange for over 19yrs and we are authorised as an e-money institution by the FCA. If you already use a provider, I can perform a comparison within minutes, to give you an indication of the potential saving you could make by using Foreign Currency Direct. If you would like my assistance I can be contacted at dcj@currencies.co.uk.

 

Pound to Austrlian dollar predictions: Major volatility expected for pound to Australian dollar exchange rates

Of late mixed outlooks for the Australian dollar has caused the pound to remain range bound against sterling, with GBPAUD fluctuating close to 1.80. The Reserve Bank of Australia recently cut interest rates and forecasters second guessed that another cut is on the horizon as the RBA would need to follow the trend of its nearest neighbour as the Reserve Bank of New Zealand cut rates by 0.5% as their last meeting. In addition the RBA has even hinted at more unconventional methods such as quantitative easing and history would tell us that this could have a detrimental impact on the value of the Australian dollar.

However in recent RBA minutes, the RBA have stated that house prices in Sydney and Melbourne have actually been on the rise in recent months which is positive news for Australia as the housing market is a key cog to Australian economy. Therefore further cuts in interest rates should help the housing market however the RBA will have to think again if house prices continue to rise.

In less than two weeks MPs in the UK will return to the House of Commons and all eyes will turn to the leader of the opposition. Jeremy Corbyn has stated that he will file a motion of confidence against Boris Johnson and it will be interesting to see if any Tory rebels will back Corbyn in a bid to stop a no deal Brexit. Forecasters are suggesting that a no deal Brexit will cause the pound to crash, therefore if Boris is ousted this could help the pound, however if Boris takes the UK out of the EU without a deal this should help clients that are selling Australian dollars to buy pounds.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

Australian dollar news: Australian dollar plummets

The Australian dollar has plummeted against most major currencies overnight, as New Zealand surprised the markets and cut interest rates by 0.5%. The RBNZ cut the cash rate to record lows of 1% which now matches the RBA’s interest rate. The cut follows the news this week that US President Donald Trump has told China another 10% tariffs on $300bn of Chinese imports is on the horizon. In addition the President has now stated that China has artificially devalued their currency in a bid to counteract the tariffs.

Forecasts are suggesting that the RBA could continue to cut interest rates early next year, combining that with lower commodity prices such as iron ore, further pressure could be on the horizon for the Australian dollar.

Pound to Australian dollar news

The pound has recovered slightly against the Australian dollar and mid market exchange rates have increased past 1.80, however I am putting this down to Australian dollar weakness not sterling strength. In fact the pound has been losing value against most major currencies this summer due to the ongoing Brexit saga. At present Prime Minister Boris Johnson’s position is that the UK will be leaving the EU without a deal by October, if the EU do no renegotiate.

The spike we have seen for Australian dollar buyers with pounds, should be considered as it looks like a vote of no confidence is on the horizon in the UK once MPs return from their summer break.  If this occurs the pound could face another bout of pressure.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer excellent exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

 

Pound to Australian Dollar Forecast (Daniel Johnson)

Inflation & US/China trade war a concern for Australian Dollar Investors

The Pound has lost ground against the Australian Dollar of late which can be largely attributed to the lack of clarity surrounding Brexit.  Australia has had it’s own trouble however.  Inflation continues to be a problem down under and it is still some way behind the Reserve Bank of Australia’s  (RBA) 2-3% target. The RBA cut rates earlier in the year to 1% in an attempt to combat inflation and there is the possibility of further rate cuts during 2019. The next interest rate decision is due during the early hours of tomorrow and although rates are expected to remain unchanged the statement following the decision from the RBA could influence markets if it is again reiterated there is the possibility of further cuts later down the road.

The heavy reliance on China purchasing Australia’s exports is also causing problems for the Australian Dollar. As the US impose increased tariffs on China, China’s growth slows which in turn has a knock on effect to the Australian economy. Investors are choosing to move away from riskier commodity based currencies in favour of save haven currencies such as the Swiss Franc or US Dollar.

Increasing probability of a Brexit No Deal

Despite the problems in Australia, Sterling still could face further losses. Boris continues to threaten no deal and stated last week he would be ‘turbocharging’ preparations to leave the EU without a deal. Boris is using the threat of a no deal as ammunition to gain a more favourable deal on Brexit. Basically speaking however, the higher the probability of a no deal the weaker you would expect the Pound to become. Brussels stance remains unchanged again reiterating there will be no concessions to the current deal on the table. It is not in Brussels interest to let the UK leave with a decent deal, they do not want other members of the bloc to consider following suit.

The timeline is also a concern. The parliamentary recess concludes 3rd September leaving less than 8 weeks to get a deal in place, keep in mind Theresa May had two and a half years. According to Bet Fair there is a 57% chance of a general election, if you look at when previous elections have taken place the currency in question tends to considerably weaken.  The British 2010 general election serves as testament to this.

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 authorised 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

Australian Dollar set to improve further against the Pound?

The Reserve Bank of Australia cut interest rates this week to its lowest level in history at 1%. As it was widely expected the markets priced in the rate cut so the value of the Australian Dollar did not feel too much of an impact.

The RBA also hinted that it may be prepared to cut interest rates even further. Since June the RBA has cut rates by 0.5% and so I think the RBA may be tempted to adopt a wait and see approach before changing monetary policy once again.

With the markets expecting interest rates to be cut to 0.75% the GBPAUD exchange rate did not move too much as there was little reason to sell the Australian Dollar.

RBA governor Philip Lowe is due to be speaking on Tuesday and his speech should provide further clues as to when they may make further changes to policy.

Therefore, if you’re in the process of converting Australian Dollars then make sure you pay close attention to Lowe’s speech next week.

The Australian Dollar also improved during the course of this week owing to the latest trade surplus figures on Wednesday. The increase in the goods and services surplus came about owing to the increase in the export market in May.

The other good news came from the Australian housing market as building approvals increased. Although house prices have fallen in recent times down under, the increase in building approvals should be taken as a positive as it means there is an appetite for making money once again in the property market.

Whilst the UK continues to struggle with the uncertainty caused by Brexit and the leadership election I think we could see further improvements in the value of the Australian Dollar.

If you would like to save money on exchange rates when buying or selling Australian Dollars and Sterling then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk