Tag Archives: buy Australian Dollars

Will the Australian dollar weaken this week?

The Australian dollar exchange rate has been trending lower in 2019 on the increased expectation that we will in the future see the RBA, Reserve Bank of Australia cut their base interest rate. Numerous commentators have for now many months been commenting that we could soon see the RBA forced to take action against numerous global and domestic factors.

In Australia there has been a growing concern over Inflation levels which the RBA had targetted to see at 2-3% but has been averaging around 1.5%. To boost Inflation levels which are now at close to 10 year lows, the RBA might need to cut interest rates to help provide some stimulus to the economy.

Cutting interest rates by a central bank can do various things which can help an economy to grow. Firstly, it can make the currency cheaper to buy which can help the country to increase exports, thereby improving the economy. Secondly, it makes loans and borrowing less costly which can encourage business and consumers to spend more, thereby increasing economic activity.

The currency becomes less valuable from the cutting of interest rates in a similar fashion to the way a lower or higher rate of interest makes a particular savings account more or less attractive.

Interest rates are of importance on the Australian dollar and are a major factor in determining the relative strength or weakness of the currency. There is a growing expectation that we could in the future see the RBA cut rates which will see the currency weaker.

It is not just the domestic issues of a sluggish economy, it is also the ongoing uncertainty surrounding the more global problems and concerns which are relating to the economic outlook on global trade.

A key example is the ongoing Trade Wars and spat between China and also the US, this has seen global trade drop and with China being such a key partner to Australia, could continue to be a major factor.

With such global pressures on trade continuing, as evidenced by the United States Federal Reserve stating they will not be raising interest rates as soon as many thought earlier this year, the Australian dollar might continue to suffer from weakness, as it responds to continuing and ever-changing global shifts.

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.

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.

Best rate to buy Australian Dollars with Pounds since October 2018 (Tom Holian)

The Pound is now trading at its best rate to buy Australian Dollars since October with the Interbank level touching above 1.85 for a brief period of time earlier on this morning.

During this week we have seen GBPAUD exchange rates improve by as much as 5 cents or the difference of £1,600 on a currency transfer of AUD$100,000 highlighting the importance of keeping up to date with what is happening on the foreign exchange markets at the moment.

Chinese economic data has shown a slowdown with GDP coming out at 6.4%, which although very impressive this is highlighting a slow down in the world’s second largest economy.

Chinese GDP hit its lowest level in ten years earlier this week and whilst the Trade Wars with the US continue to affect China this is also another reason why the AUD is struggling

As Australia is heavily reliant on what happens with the Chinese economy this is in part a reason for the weakness in the value of the Australian Dollar.

Another reason for the weakness of the Australian Dollar comes down to the level of interest available for the investor. Last year the US Federal Reserve hiked interest rates to 2.25% and with the Australian interest rate sitting at 1.5% investors are bypassing the Australian Dollar in favour of the US Dollar for more attractive rates of return on their investment.

As we turn the focus back towards the UK it appears as though the Brexit may continue to run and run with lots of speculation that the UK will extend Article 50 rather than leave the European Union on 29th March.

Since the start of December when the previous vote was postponed the most recent vote from early last week confirmed that a majority of 230 MPs voted against the current Brexit deal on offer.

At the moment the likelihood of MPs voting through the next plan appear very unlikely and this suggests that Article 50 will have to be extended unless the UK crashes out of the European Union with a no deal Brexit and this is why the Pound has made gains vs the Australian Dollar.

Having worked in the foreign exchange industry since 2003 I am confident of being able to offer you better exchange rates than using your own bank so if you would like a free quote when buying or selling Australian Dollars then contact me directly for a free quote and I look forward to hearing form you.

Tom Holian teh@currencies.co.uk 

 

 

The reasons why the Pound could break 1.80 this month against the Australian Dollar

The Pound has briefly touched 1.80 against the Australian Dollar this week but has yet to make a sustained break past this particular level of resistance. However, I’m confident that the Pound will keep knocking on the door of 1.80 before eventually breaking through before the end of this month.

The political uncertainty in the UK has actually done the reverse of what many expected to happen in terms of the value of Sterling.

Clearly the Brexit deal on offer is not something that MPs have much confidence in, which saw a majority vote of 230 against the deal. Since then, the Prime Minister Theresa May has managed to once again survive a vote of no confidence with the Tories and the DUP voting in favour of supporting the Prime Minister.

The reason why the Pound has found support against a whole host of currencies including vs the Australian Dollar is because it looks more and more likely that the withdrawal from the European Union with a no deal Brexit will not happen.

Theresa May has yet to confirm officially if the UK will rule it out and I think that she is doing so to keep her negotiating power as strong as possible when she next meets with the European Union.

It appears also that the UK will attempt to extend Article 50 as it is clear that neither the UK nor the European Union is ready for the end of March.

Even though the uncertainty as to what may happen next with the Brexit talks still exists the good news for the Pound is that the finite period before the end of March may not now happen and this either moves the UK towards a softer Brexit or perhaps even no Brexit if MPs do not manage to agree on the terms of any future deal.

The market will ultimately want trade not to be adversely affected and therefore this is why I think we will see the Pound break through 1.80 during January.

I have personally worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers and I’m able to offer you bank beating exchange rates so if you would like to save money then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

GBP to AUD Rates Rally after Weaker Australian Unemployment Data (James Lovick)

Pound to Australian dollar exchange rates have rallied higher this week with rates for the GBP AUD pair breaking over 1.78 and creating a good short term window of opportunity for those looking to buy Australian dollars. Australian unemployment data released yesterday arrived weaker than expected with a small rise in the headline number.

Unemployment down under now sits at 5.1% which is slightly worse than the 5% that was expected, something that will be picked up on by the Reserve Bank of Australia. The central bank has hinted that interest rates may need to rise in 2019 although the economic data will very much dictate whether or not this happens. Any signs of a slowdown will almost certainly put the Reserve Bank of Australia on the defensive which could result in Australian dollar weakness.

GBP vs AUD on the whole is on a weaker footing as result of the ongoing Brexit uncertainty in the UK. However the deadline of 29th March 2019 is fast approaching and a parliamentary vote to be held 14th January 2019 will dictate the direction of travel for the pound. If Theresa May finds herself able to get this deal through parliament then the pound could see some major gains. The reality at the moment is that this is highly unlikely and an uncertain period could like ahead. With no concessions being offered by the EU the deal is likely to be voted down over concerns for the Irish backstop which currently is not time limited.

The other big factor for GBP vs AUD is what happens between the US and China with regards future trade. Tensions are fraught at the moment with allegations of corporate espionage in the technology sector. Although further tariffs on Chinese goods have been paused there is every chance that all of China’s goods could face US trade tariffs, something that will be of concern for the Australian dollar. Any slowdown in global growth could see problems for the Australian economy which may be adversely affected.

For more information on dollar exchange rates and assistance in making transfers either buying or selling Australian dollars then please feel free to contact me James at jll@currencies.co.uk

Australian dollar forecast – Australian dollar weakness ahead?

The Australian dollar has weakened overnight as investor focus shifts towards the now wider split between the US and Australian interest rate. With Australian interest rates at 1.75%, but the US now at 2.5%, the US dollar is a more attractive currency to hold and it has gained ground against the Australian dollar, weakening the Aussie in the process. The US raised interest rates overnight and are expected to raise further in 2019, despite many views to the contrary. This could see more pressure on the Australian dollar in 2019.

The economic news out of Australia overnight too was fairly positive with the Employment rate and the employment change, month on month both posting gains. This shows the Australian labour market is performing well and if such news continues in 2019, could be more supportive for an interest rate hike down under, which has so far been so elusive. The Australian dollar is likely to endure a mixed bag as we enter 2019 with the market closely following the latest news on US and Australian interest rates.

Global trade has been another factor driving the Australian dollar as the market ponders the possible negative effects from Donald Trump’s Trade Wars with China. With Australian trade relations with China forming a major part of the Australian economy, the market has been closely monitoring the sentiments on the Trade Wars, plus the possible negative fallout from any economic woes. The fact the Australian currency acts as a barometer of global trade and risk sentiment, owing to its economies close relationship to traded commodities like Coal, Steel and Aluminium, makes it all the more sensitive to such news.

Confidence is still holding in global markets but it does seem many are looking into the future with less reasons to be optimistic. This could ultimately spell trouble for the Australian dollar in 2019, particularly if the Trade Wars deteriorate further and the US presses ahead with their economic plans.

If you are looking to buy or sell Australian dollars then please do get in touch to discuss the latest news and forecasts. With the currency so sensitive to global news and developments it is important to understand all of the latest news and events to move the rates.

Thank you for reading and please contact me Jonathan Watson to discuss further.

Jonathan Watson

jmw@currencies.co.uk

 

Brexit chaos continues as Conservative MP’s trigger a vote of no confidence in PM May, will this put pressure on GBP/AUD?

This morning it’s been announced that a vote of no-confidence has been triggered by the Conservative Party after Sir Graham Brady, the Chairman of the 1922 Committee confirmed that he has received at least 48 letters of no-confidence from Conservative MP’s.

The Chairman of the 1922 Committee isn’t required to announce how many letters he’s received but we do know that it’s at least 48 as this number constitutes 15% of the Tory members. Since the news broke the Pound has actually remained unchanged and this is probably because the vote will take place this evening between 6.00 pm and 8.00 pm so until shortly afterwards we won’t know the outcome and therefore, the next steps for Brexit.

Since the announcement which was around 7.45 am this morning, there have been a number of Conservative MP’s that have outlined their plans to support May, with the general consensus that a change in leadership this far into the Brexit process would be chaotic. If there are a number of votes against against her though, there is a chance she may resign even if she’s not obliged to owing to the lack of support from her own political party.

May has already given a speech outside Downing Street this morning whereby she’s highlighted that if she’s replaced a new leader would have to delay Brexit, as they wouldn’t have enough time to renegotiate the withdrawal agreement.

With regards to the Pound to Aussie Dollar exchange rate I would expect to see the next potential market movement to come after the vote this evening, with the result expected to be released shortly after the vote.

AUD exchange rates have been influenced over the past week and a half by the concerns that the US-China trade war tensions could resurface, as China is Australia’s main trading partner. Those of our readers planning a GBP/AUD trade should follow this matter as it’s the main driver of AUD value at the moment.

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.

Australian dollar Falls after Chinese Arrest by US Authorities (James Lovick)

Despite the Brexit uncertainty ahead of a crucial parliamentary vote next week the pound to Australian dollar exchange rate has recovered after the CFO of a Chinese Telecoms giant Huawei was arrested in Canada by US authorities after allegedly breaching US Iranian sanctions. There was recent optimism for a cooling of trade tensions after the G20 summit last weekend following a positive talks between US President Donald Trump and Chinese leader Xi Jinping.

A 90 day pause on future trade tariffs was agreed to try and find a way forward which in fact helped strengthen the Australian dollar. This new political upset could make the negotiations difficult especially if there is an escalation of events. Rates for GBP to AUD have now moved higher to 1.7650 for the pair.

Those looking to buy Australian dollars with pounds should be braced for major volatility around the time of the meaningful vote to be held in parliament on the terms of the withdrawal agreement and political declaration. It is looking highly unlikely that she will win the vote and the markets are now speculating as to how many votes she loses by. If she lost by under 100 the feeling is that this would be manageable and she could possibly go to Brussels in the hope of finding a solution to the Irish backstop. However there is talk that the number could be more like 200 which could see the Prime Minster go at this crucial stage at the end of the Brexit process.

Some Conservative members are suggesting delaying the vote to find a solution and to ovoid what could be a fatal defeat for Theresa May. The outcome of this vote will almost certainly dictate the future direction for the pound and clients would be wise to plan around this event. The volatility to follow could be similar to that seen after the Brexit referendum in 2016. Should a deal eventually be reached between Britain and the EU then there could be major gains for the pound and a good opportunity for buying Australian dollars. The risk of a no deal scenario though cannot be ruled out and is probably looking the more likely of the two options.

I have been helping clients move their funds to and from Australia at excellent rates of exchange for fifteen years. For more information and guidance timing your exchange around these events please feel free to contact me James at jll@currencies.co.uk

Brexit Impact papers push Sterling lower against the Australian Dollar

After a strong start to the trading session yesterday, Sterling exchange rates have seen their fortunes reverse since yesterday afternoon when Brexit Impact papers were released by both the Government as well as the Bank of England.

Both releases suggested that the UK will be worse off by carrying out the Brexit with the BoE outlining a number of worse case scenarios for the UK economy in the case of a no-deal Brexit. Their report outlined the potential for the Pound to lose 25% of its value against both the Euro and the US Dollar which would put Sterling below parity vs both of these key currencies. Property market falls of 30% were also contained within this worst case scenario Brexit report as well as unemployment potentially rising to 7.5% and since this report we’ve seen a sell-off of the Pound’s value which has accelerated this morning.

After almost reaching 1.77 yesterday we’ve seen the pair drop below 1.75 this morning which goes to show how much the currency has been impacted by these reports. It’s also worth noting that the Australian Dollar has lost value recently owing to the sharp drop in the value of iron ore which is a key export of the Australia’s. Iron ore prices have dropped by 9% this week which represents the largest drop in over a year. The rhetoric between US President Donald Trump and Chinese leaders has also ramped up with concerns of a global slowdown owing to the trade war once again impacting currencies such as AUD’s.

Economic data releases are light for the remainder of the week between the UK and Australia so it’s likely that Brexit talks will remain the main driver of currency fluctuations.

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.