Tag Archives: exchange rates

FED and EU Summit to drive GBPAUD exchagne rates

This week, events that are not directly involved with Australia and the United Kingdom will dictate GBPAUD exchange rates. 

The Federal Reserve which is the United States central bank, will release there latest interest rate decision Wednesday evening. Speculators are predicting that the FED will raise interest rates from 1.25% to 1.5% which will match the Australian interest rate. Regular readers will be aware that there is a direct correlation between the commodity currencies and the US dollar. As the US dollar is a safe haven and the commodity in some ways is a risk, I expect to see the Australian dollar sold off and the US dollar to be purchased.

The EU summit on the 14th and 15th December, should outline more detail about the Brexit negotiations. UK Prime Minister Theresa May has announced in recent weeks that Brexit negotiations are going well and therefore the UK and EU have agreed to start stage 2 negotiations. If the EU reiterate Theresa May I expect this could provide a further boost for sterling.

Therefore it looks like the Australian dollar could devalue Wednesday evening and the pound could have a finish to the week, therefore my forecast is for GBPAUD to break 1.80 by the close of play on Friday. If you have Australian dollars to sell and need to buy sterling I would recommend getting in touch as soon as possible.

If you are buying or selling Australian dollars in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Australian dollar is much weaker and could get even weaker! GBPAUD and EURAUD forecast

The Australian dollar is much weaker overall as concerns grow over the strength of the Chinese economy and also other currencies become more favourable to hold. The expectation is that for the Australian dollar and the Reserve Bank of Australia there will be no interest rate rise any time soon and this will see the currency weaker.

The Australia dollar is a beneficiary of improved global confidence particularly in China. China is a major economy and the strength of the Australian dollar is widely attributable to the strength and weakness of the Chinese economy. Overall impressions for the future centre around a weaker Chinese economy as evidenced by the concerns over the stock market in China which has a large public following

Concerns about the possibly negative outlook on the Chinese economy has troubled the market and this has seen Aussie weaker as a wider reflection of stability in the region.

With sterling finding much favour as the UK government makes gentle progress on Brexit and the Euro also finding form on the back of progress with German coalition talks, GBPAUD and EURAUD have both risen hitting 1.7556 and 1.5697 on the interbank rates. This is presenting excellent fresh opportunities on both currency pairs which should be monitored very closely for potential buyers.

If you have a transfer buying or selling Australian dollars, global events are increasingly driving the Aussie exchange rates, as opposed to domestic news in the Australian economy. Trying to anticipate and monitor the current outlook is no easy feat but it does seem like for now the Aussie will remain weaker.

Longer term trends could easily see the Aussie regain back these losses but for Aussie holders this could prove an expensive gamble. For more information at no cost or obligation please don’t hesitate to contact me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from and assisting you.

Iron prices continue to put pressure on the Australian dollar

GBPAUD exchange rates have increased in value by 8 cents since September as the Australian dollar has been under pressure and sterling has rallied off the back of an interest rate hike and Brexit developments. To put this into monetary value a £200,000 conversion into Australian dollars now generates our clients an additional 16,000 Australian dollars.

The Australian economy relies heavily on iron ore, as iron ore makes up 16.3% of Australian exports. When iron ore prices fall this tends to have a direct impact on Australian dollar exchange rates. China is Australia main trading partner and as construction activity has been slowing in the 2nd largest economy the need for the commodity iron ore falls. Forecasters are suggesting that in the upcoming months iron ore prices will continue to fall and the price per tonne could plummet to $50.

The Australian dollar has also lost value in recent weeks as the Reserve Bank of Australia continue to give a dovish outlook in regards to interest rates. Governor Philip Lowe has insisted that monetary policy will not be changed in the foreseeable future and this was supported by the poor inflation numbers last month.

A data release to keep a close eye on for the remainder of the year is the US interest rate hike in December. If the US hike interest rates (87% chance according to forecasters) I expect a major sell off of Australian dollars which would make the Aussie cheaper to buy.

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.

Sterling to Aussie Dollar rate plunges after BoE rate hike, what happened? (Joseph Wright)

This afternoon at lunchtime the Bank of England hiked interest rates by the expected 0.25 basis points, although in the immediate aftermath the Pound fell dramatically against every major currency pair.

At the time of writing the Pound to Aussie rate has fallen by 2% with the GBPAUD rate now sitting at 1.6917 and the AUDGBP rate sitting at 0.5910.

This afternoons move has come as a surprise to the markets, as usually when the base rate increases the underlying currency climbs. The opposite has happened today though as it appears that prior to the move by the Bank of England the hike was priced into the market, and the commentary afterwards was a bit more bearish than the Sterling bulls had hoped for.

It’s looking like there won’t be a particularly aggressive approach from the Bank of England regarding monetary policy moving forward, which is why we’ve seen the Pound lose so much value in such a short space of time.

There won’t be any further major economic announcements out of the UK tomorrow that are likely to move markets to such a great extent, although Australian Retail Sales data is coming out in the early hours of this morning which may impact the rates.

If you wish to be kept updated regarding any other short-term price movements between the pair, do feel free to register your interest with me. Moves such as today’s can result in large differences in a currency transfer outcome so being aware of these moves can be highly beneficial.

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.

 

 

Political issues in Australia may weigh on the Australian Dollar (Daniel Wright)

We have recently seen a number of resignations from MP’s in Australia due to the issue with dual nationality which has caused a little political uncertainty, generally seen as negative for a currency.

This current issue surrounds a constitutional law from 1901 that anyone holding a duel nationality is unable to serve in the House of Representatives. It appears that numerous MP’s had no idea about this need, hence the fact some have now been caught out. There is now growing pressure on the Australian Government to carry out checks on at least another 200 members to ensure they do not fall foul of this too. Any further news of more resignations coming may add weight to the pressure on the Australian Dollar, leading it to get a little weaker.

There are four main factors that can impact the strength of a currency, these are economic stability, political certainty, acts of terror and acts of god and political problems can lead to weakness for a currency, just as much as economic issues can too.

Today will be important for anyone looking to buy or sell Sterling against the Australian Dollar, as we have the latest Bank of England interest rate decision in the U.K where the Bank of England are expected to look at raising interest rates by 0.25%.

Should this happen then the Pound may gain a little value against the Australian Dollar, although we may have seen much of this movement priced in over the past week or so. Be aware that if the BOE do not hike rates, or should they hike with 0.25% but release fairly negative comments about future hikes then we may see a drop off in the value of Sterling, making Australian Dollars more expensive to buy with the Pound.

If you have the need to buy or sell Australian Dollars against any major currency then it may be prudent to contact me directly, generally I will be able to save you money on your exchange rates both by getting you a better rate than your current broker and by assisting you with market information so that you have help with the timing of your transaction.

If you would like my assistance then please do feel free to get in touch with me directly by emailing djw@currencies.co.uk and I will be more than happy to contact you personally.

Australian inflation and UK GDP push GBPAUD above 1.70

GBPAUD exchange rates have strengthened by 3 and 1/2 cents today off the back of Australian and UK economic data  releases. To put this into monetary value a £200,000 transfer at the high of the day compared to the low would have achieved our clients an additional 7,000 Australian dollars.

In the early hours of the morning Australia released their latest Consumer Price Index (inflation) numbers. Forecasters were predicting 2% however the inflation numbers disappointing and fell to 1.8%, leading to a sell off of the Australian dollar. The reason for the Australian dollar being heavily sold off is because now inflation has fallen the Reserve Bank of Australia will continue to give dovish statements in regards to interest rates.

Later in the morning the third revision of UK GDP was released. GDP exceeded expectation and was released at 0.4% from 0.3%. This doesn’t seem much, however it shows growth and something that many economists have not foreseen. The pound strengthened dramatically against all of the major currencies as this data release could be the final nail in the coffin and the Bank of England will be forced to raise interest rates on November 2nd.

For clients buying Australian dollars using sterling, central levels have now broken through 1.70 and for many clients this has been there target over the last 6 months. People need to remember that central levels were in the 1.50s not long ago. For clients trading short term, you need to decide whether to cash in now or wait for the Bank of England’s interest rate decision.

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.

 

Brexit to dictate GBPAUD exchange rates

Last week GBPAUD exchange rates were heavily influenced by Brexit developments. There were a few key head lines.Firstly Brexit negotiations had hit deadlock according to head EU negotiator Michel Barniner however European Council President Donald Tusk believes the deadlock comments had been exaggerated. In addition UK Prime Minister Theresa May gave a speech at the EU summit late Friday and confirmed the UK and EU had made key progress and a deal on EU citizens rights is nearly secured and reports are suggesting that she could offer another €20bn for the divorce settlement fee.

It appears that Brexit negotiations are heating up, and if EU citizens rights and the divorce settlement bill are agreed, I expect that the pound will make considerable in roads against the Australian dollar. 

In other news there are a few key economic data releases to look our for in the weeks to come. On Wednesday morning Australia will release their latest inflation numbers. This data releases can have a major influence on future monetary policy decisions. Furthermore forecasters are still suggesting there is over 50% chance that the Bank of England will raise interest rates on November 2nd. If this occures GBPAUD exchange rates could break through the 1.70 barrier.

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.

Will GBPAUD break through 1.70?

Economists are split at present in regards to the future of GBPAUD exchange rates, and after reading the last few articles on this website, it seems that traders on the trading floor are also split and it’s no surprise when the UK’s Brexit negotiations continues to spring surprises.

Head EU negotiator Michel Barnier has announced that Brexit negotiations had hit deadlock however that same day reports were suggesting that EU officials would meet to discuss what a potential trade deal would like if the UK and EU come to an agreement about EU citizens rights and the divorce settlement bill.

With UK inflation breaking through 3%, the market is pricing in an interest rate hike which could push GBPAUD through the 1.70 barrier. However Governor of the Bank of England Mark Carney’s comments yesterday do not fill me with much confidence. He was asked if the Bank of England plan to change monetary policy and would not give a straight answer. Nevertheless in the next 2 weeks I believe the pound will strengthen enough in anticipation providing Australian dollar buyers with a window of opportunity to buy Australian dollars above 1.70.

Longer term its important to understand that predicting the Brexit negotiations outcome is impossible. Positive news will strengthen the pound negative will do the opposite. I am optimistic that deal will be struck eventually however other traders on the floor are not. If you are purchasing pounds with Australian dollars or vice versa I would recommend getting in touch and I will keep you up to date with regular information until you are ready to convert drl@currencies.co.uk.

If you are buying or selling Australian dollars in the upcoming months and want to achieve rates of exchange that are better than your bank, whilst receiving regular economic information feel free to email me with the currency pair (AUDGBP, AUDEUR, AUDUSD) the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with my forecast and the process of converting currency. My direct email address is drl@currencies.co.uk and I look forward to receiving your email.

 

Will GBPAUD continue to rise this month?

The pound made considerable gains against the Australian dollar throughout September due to the Bank of England’s stance surrounding future interest rates and the dovish stance from the Reserve Bank of Australia.

Governor of the Bank of England Mark Carney announced that an interest rate hike could occur as early as November and currency speculators have purchased the pound in anticipation.

Governor of the Reserve Bank of Australian Philip Lowe confirmed that an interest rate hike anytime soon is unlikely as they do not want to see household debt rise further.

In other news iron ore prices in Austrian have been taking a tumble in recent weeks. Iron ore is Australia’s largest export and when iron ore prices fall this tends to mean the Austrian dollar follows suit. If iron ore continues to decline I expect buying Austrian dollars will become cheaper in the upcoming weeks.

Another factor that will have a major impact on GBPAUD exchange rates is Brexit developments. Currently Brexit negotiations have stalled once again as UK and EU negotiations cannot come to an agreement in regard to the divorce settlement or EU citizens rights once the UK depart the EU. This could be a story that has a positive or negative impact on the pound.

If you are buying or selling Australian dollar in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

How will Australian interest rates impact the Aussie dollar?

Countries around the globe this year have been raising interest rates due to the global outlook improving. The Reserve Bank of Australia are one of the countries that have kept interest rates at record lows and many economists have predicted that a hike could occur sooner rather than later.

However Australian lender Westpac announced this week this think it is unlikely that interest rates will be raised until 2020 which could have major implication for Australian dollar exchange rates, if their predictions come true. Westpac’s theory is that it is unlikely that wages pressure will rise and consequently inflation will remain at current levels.

With most leading nations raising interest rates the Australian economy would be left behind and investment would continue to leave the Australian dollar which means buying currency would become more expensive.

However ANZ have a slightly different view and believe household debt is high, referring to the housing bubble in the major cities therefore they believe the Reserve Bank of Australia are likely to rise twice in 2018.

It just shows trying to predict Australian dollar exchange rates long term is very difficult however I believe the Governor will continue to monitor and if the Australian dollar exchange rates devalue further in the upcoming months the likelihood of an interest rate hike increases.

If you are buying or selling Australian dollar in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **