Tag Archives: currencies

Aussie Comes Under Pressure With US, Chinese, And RBA News Still To Come

Sterling made good gains against a weakening Aussie today, with the US Dollar making significant headway versus it counterpart from Down Under.  Weaker than expected Chinese data triggered a slight sell off but there is still a lot of news to be published in the next few days that could have a major impact.  UK GDP revisions this morning didnt cause any major surprises so what things are worth keeping an eye on over the next few days?

Firstly we have US Durable Goods and a speech by new Head of the Fed, Janet Yellen, tomorrow afternoon.  US monetary policy has been a major driver for the Antipodean currencies who benefitted massively under the cheap supply of money through Quantitative Easing.  Now that it is being unwound, the respective currencies have been sold off and the pace of this has been affected by the pace at which the Federal Reserve tapers.  Yellen is known to be cautious but the speech will be closely analysed for further clues about policy- with US GDP revisions on Friday expect a lot of volatility as global confidence shifts.

EUR AUD trades will also need to watch German unemployment and inflation data tomorrow, and wider European unemployment and inflation on Friday.  This could be a trigger for Euro weakness if inflation is low as it may force the ECB’s hand into action soon.  The next rate meeting is next week so be prepared just in case.

Over the weekend we have Chinese Manufacturing PMI data and depending on the strength of this we will see Aussie movement- a strong showing will be good for the AUD by suggesting increased demand for Aussie raw materials, and a weak showing suggests worse news ahead for the Aussie economy.  With The RBA rate decision in the early hours of Tuesday morning, the next few days could be the best opportunity to buy AUD for a while as I really cant see the RBA changing stance from last month where they seemed pretty happy with current interest and exchange rates.  If you do need to transfer money to Australia and would like some assistance then please feel free to email Colm at cmg@currencies.co.uk or call 01494 787 478

 

Aussie Retail Figures Due Tonight – Will The Aussie Fall Back?

The Aussie Dollar has managed to claw back some ground in the last couple of days as the RBA took the possibility of any interest rate change of the table.  However data in Australia lately has been a little bit shakier than this time last year so will tonight’s retail figures have any impact on exchange rates?  In truth I don’t think it will be as significant an impact as some commentators are suggesting given the population size and I think any movement will be temporary as the markets continue to focus on interest rate expectations and other external factors like demand from China.

To this end keep a watchful eye on data overnight Thursday for Chinese services and the monetary policy statement, and Fridays US non farm payroll data as the level of US jobs is still the main determining factor on the pace of the US Federal Reserve tapering their Quantitative Easing program.  QE has been a significant factor in Aussie Dollar strength over the last few years, as investors have been able to borrow money cheaply Stateside and then use it to fuel investments Down Under.  Now it is being unwound, the Aussie Dollar has been sold off dramatically in response.  Janet Yellen has now taken over at the Fed and it appears as though they will taper at a rate of $10bn a month, however the jobs rate could accelerate or delay this if the data is extremely high or low.

Given the RBA are not likely to cut, and Mark Carney at the Bank of England has made it clear a UK hike in the near future is out of the question, I still think there is scope for the Aussie to gain a little ground versus the pound.  However currencies do not move in straight lines, so timing the day of your currency transfer is absolutely key.  If you would like more information about how to get the best foreign exchange rate then please feel free to email Colm at cmg@currencies.co.uk or call 01494 787 478 for a free no obligations quote and discussion of your exact requirements.

How long will Australian Dollar strength last? (Tom Holian)

This morning Sterling has fallen for the third day in a row as UK PMI Services data come out slightly lower than expected. This has surprised the markets with Sterling falling across the board against most currencies. Tomorrow morning sees the release of Exports down under for November which could cause volatility for the GBPAUD currency pair.

The most important data release for this week will be the Bank of England’s interest rate decision on Thursday. I think it’s unlikely that we’ll see any change of interest rates or further QE but any mention from Carney about the economy shortly afterwards could have an impact on GBPAUD exchange rates.

I still believe longer term that we’ll see the Pound strengthen against the Australian Dollar even if the Aussie has had a small fightback against Sterling over the last few trading sessions. It could be argued that the AUD was oversold during 2013 so this period is simply a bit of short term profit taking.

A survey published this morning has shown that UK business confidence is running at a 20 year high according to Lloyds. 1,500 businesses have been surveyed so with confidence high in the UK this again is another reason why I anticipate Sterling strength longer term.

If you have a currency requirement this month and want to save money compared to using a bank to buy your currency then get in touch for a free quote Tom Holian teh@currencies.co.uk

 

Sterling AUD Exchange Rate Hits Year High! (Tom Holian)

GBPAUD exchange rates have continued to rise this week following the FOMC minutes earlier this week. Since the end of last month the Pound has gained by over 4% against the Australian Dollar and the potential tapering of QE by the US whenever that may be could send AUD even weaker. The less available money available this could lead to a sell off from riskier currencies including the AUD, NZD & ZAR. A fall in money supply is more likely to hamper these currencies and investors could therefore seek safe havens such as the USD or GBP.

The comments made by RBA Governor Glen Stevens said he was rather open minded that they are open to the idea of intervention to weaken the Aussie in order to remain competitive internationally. This has sent GBPAUD exchange rates to their highest level all year and even this morning the rates have continued to surge in an upwards direction in favour of Sterling.

My personal opinion is that any form of QE by the RBA is unlikely and that if anything they will look to cut interest rates in Q1 on 2014. On Wednesday Guy Debelle the RBA’s assistant governor also suggested that they would prefer the Australian Dollar to be lower than where it is at the moment. He also added that the future of the Aussie Dollar is heavily reliant on what happens when the US does decide to rein in its QE programme.

With the recent instability in Europe this has also led to a large sell off from riskier currencies with investors seeking safe havens. Sterling has been the main benefactor of the movement of funds as with our growth forecast recently having been increased investors have chosen Sterling as the safe haven of choice.

If you are thinking about buying or selling Australian Dollars then feel free to contact me for a free quote Tom Holian teh@currencies.co.uk

GBPAUD Exchange Rates break through 1.55+

With the recent slowdown in China, some mining companies down under showing lower profits and Australian interest rates cuts this year we have seen the GBPAUD exchange rate improve by 8% since March and my feeling is that the current trend will continue in the short term. The problem that the country faces is that the mining industry is affecting the rest of the country and with such a strong Aussie Dollar it may potentially harm the economy. I think we will see further interest rates cuts towards the end of this year and we could see improved exchange rates from where we are now.

This week we have seen the Bank of England improve growth forecasts which has given Sterling a welcome lift not only against the AUD but also most other currencies. With inflation high and growth forecasts up we can expect to see the Pound gain as high inflation creates an argument to perhaps either keep interest rates on hold or even postpone further Quantitative Easing.

As one of the best performing currencies during recent years it could be time for the Aussie Dollar to start its slip back so keep an eye on what is happening in both China and the UK in order to see what may happen next. If you have a currency requirement to make and would like to use a specialist currency broker to save you money when buying Australian Dollars feel free to contact me directly for a free quote Tom Holian teh@currencies.co.uk Having ten years experience in the fx world I am confident that I can better the rates offered by your bank.


 

Australian Dollar Continues to Strengthen (Tom Holian)

The Australian Dollar has continued its recent strengthening this week following some surprisingly poor manufacturing data released in the UK. Activity in the sector shrank in February to 47.9 from January’s figure of 50.5. Anything below 50 represents contraction and so the current weakening of the Pound could continue in order to drive the UK’s economy with an export led recovery. The results were a big surprise this morning and Sterling has fallen by over 0.6% this morning against the Aussie Dollar or a difference of £400 per AUD$100,000 converted.

The data has been seen as a massive setback to the recovery of the UK and points us in the direction of a triple dip recession. If the current quarter is negative which we’ll find out after March the rates for Sterling could fall a lot further than even where they are at the moment. With an uncertain British economy this means that Sterling is testing lows against the Australian Dollar. Indeed, manufacturing in the UK accounts to over 10% of the overall economy so these figures are not pleasant reading.

Over in America revised GDP figures were published for Q4 2012. The data showed that the economy has actually grown by 0.1% compared to the previous contraction of -0.1%. With the American economy stabilising this means that investors are attracted to riskier currencies including the Australian Dollar which is another reason why the currency has strengthened this week.

To ensure you’re getting competitive rates of exchange when transferring currency feel free to contact me directly Tom Holian teh@currencies.co.uk

 

Reserve Bank of Australia Minutes

RBA Minutes were published over night which showed that there might be room for further easing. The central bank did suggest that the current interest rate of 3.25% was ‘appropriate’ but my feeling is that we have a cut round the corner. The RBA will not meet in January or February which means that is there is further movement it is likely to be in December as waiting till March could harm the economy during that period. The recent slowdown in the mining industry meant that the RBA have downgraded their GDP forecast for 2013 to less than 2.75% before climbing again in 2014 to 3%. As always it is important to consider these forecasts but at the same time it is almost impossible to predict accurately as there are so many variables which could affect the economy. My personal thoughts are that as long as China continues its investment in Australia and buying up raw materials/resources the Australian Dollar will remain relatively strong against Sterling, Euro and US Dollar.

A recent article published by the International Monetary Fund has suggested that the Australian Dollar may be used as an official reserve asset. As one of the world’s leading commodity-rich currencies this seems like a good idea at the moment as with such enormous reserves particularly in Western Australia the expansion of this particular area could keep the AUD strong. The idea behind the plan is to firm up the global banking system by having different styles of industry/commodities to support the wider global economy to avoid a future problem like the one experienced during the credit crunch of 2008.

Tomorrow the Bank of England publishes its minutes so any signs of further Quantitative Easing may cause an opportunity for Sterling to increase against the Australian Dollar so if you have a currency requirement and want to save money when buying Australians Dollars compared to using a bank feel free to contact me directly on email Tom Holian teh@currencies.co.uk

Will Australian Interest Rates be Changed Tomorrow?

GBP to AUD Australian Dollar Strength AUD to GBP

With the Reserve Bank of Australia meeting tomorrow to discuss their interest rate decision the chances are that there will be no rate cut. With inflation out today showing a decrease of 0.2% in June the likelihood is that the RBA does not need to amend its monetary policy. However, do keep a close watch on how the decision may affect the Australian Dollar exchange rate tomorrow.

The Australian Dollar has continued its recent run of strength hitting 1.5250 this morning even after news that China’s manufacturing activity has dropped to its lowest level since November. The main reason is likely to be down to the good news coming from the recent European summit which has encouraged investors to flock back to the AUD. The rally which began on Friday today sees no signs of abating. The Australian stock market has rallied and are being driven by strong demand for commodities after the positive news from Europe.

The next target figure for the Australian Dollar will be 1.51 in the short term but I would not expect to see much lower especially if there is no movement tomorrow from the Reserve Bank of Australia. With Sterling struggling against the AUD, NZD and ZAR it is clear that money is being taken out of Sterling and being used to gain interest in the aforementioned currencies.

If you need to make a currency transfer to buy or indeed sell Australian Dollars please do not hesitate to contact me. teh@currencies.co.uk Please quote ‘Australian Dollar Forecast’ for preferential exchange rates.