Tag Archives: GBP AUD

Sterling Falls Lower against Australian Dollar – Brexit Jitters (James Lovick)

The pound has fallen even lower against the Australian dollar with rates briefly falling below 1.73 for the GBP AUD pair. The Australian dollar outlook isn’t looking that great at the moment with the ongoing trade war between the US and China. Only yesterday the US agreed a further 25% tariff on Chinese imports worth $60 billion. China is likely to retaliate further and it has even been reported that President Donald Trump is considering putting tariffs on everything the US imports from China which equates to about $500 billion. Already the Chinese stock markets are taking the brunt of this and if China does move into a downturn then this could end up harming the Australian dollar. Australia’s major export iron ore is sent to China in large volumes for steel production and so any global slowdown could see demand for this commodity fall sharply proving negative for the Aussie as a commodity currency.

The Reserve bank of Australia will be releasing the Monetary Policy Statement tomorrow which could offer some more clues as to when then the central bank may look to raise interest rates again. Although the next move is anticipated to be upwards the next hike is likely to be someway off yet.

Despite the above the pound has still managed to fall considerably lower against the Australian dollar this week although this is down to Brexit uncertainty in the UK following comments from both Bank of England Governor Mark Carney and Trade Secretary Liam Fox. Both have suggested there is a strong likelihood of a no deal Brexit which is spooking the markets and seeing the pound tumble. Until clarity is offered which is not likely to come until after the summer parliamentary recess the pound could see further losses. If the UK & EU cannot agree in the coming months on a withdrawal agreement then sterling is likely to fall lower.

For more information on Australian dollar exchange rates and how to achieve the best rates for buying or selling dollars then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Boosted on Stronger Retail Sales (James Lovick)

The Australian dollar has been boosted following a jump higher in Australian retail sales which saw the best performance in over a year. The better data signals a buoyant consumer market which should lend support to the Australian economy. The numbers jumped 1.2% for the last quarter which is considerably higher than the 0.8% that was expected and welcome news in that Australia has also suffered with weak wage growth which has been squeezing pockets down under.

The Reserve Bank of Australia meet on Tuesday to discuss interest rates although there is unlikely to be any change at this meeting. Interest rates are currently set at 1.5% and whilst no change is expected any comments following the meeting from RBA Governor Philip Lowe could see a market reaction for the Aussie.

Rates for GBP AUD are currently hovering around 1.75 for the pair and testing the lower levels seen in its recent range. Much of the slide has stemmed from the uncertainty in the UK over Brexit in recent weeks. Despite an interest rate increase last week from the Bank of England the pound has actually fallen after Governor Mark Carney suggested that the chance of a no deal Brexit was uncomfortably high. The pound has been trading on the back foot following on from his comments which have made the markets uneasy hearing this from the top. Until clarity is offered the pound is likely to remain under pressure against the Aussie. There is currently a good opportunity to sell Australian dollars for pounds and any additional uncertainty on Brexit could see the pound weaken further. British politics have gone into sleep mode with the summer parliamentary recess but expect more volatility for the pound towards the end of the month.

For more information on Australian dollar exchange rates and for assistance in making transfers at the best rates then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Forecast – Trump Agrees Zero Tariffs with EU (James Lovick)

The pound has made a small recovery against the Australian dollar with rates back over 1.77 for the GBP AUD pair. The ongoing theme for the Australian dollar in recent weeks has been the trade war story which has stemmed from trade policy decisions made by US President Donald Trump. The latest in the story is that the President has now agreed with the EU tariff free trade between the US and EU. Whilst this does not directly have an impact on the Australian economy it does signal a change in tact by President Trump and could suggest there is light at the end of the tunnel in this escalation of trade tariffs with China. The concern for the Aussie is that if there is a global trade war then the commodity currencies could suffer so any softening in trade policy coming out of the US could actually be seen as good for the Australian dollar.

Economic data from down under has been stronger in this last month with retail sales and consumer confidence performing better than expected. The recent employment data was strong and highlighted a buoyant workforce which has also proved beneficial for the Australian dollar.

Now that the British parliament has ended for the summer recess there are unlikely to be any major developments on Brexit until the end of August or early September. The pound has been left on a weaker footing after the high profile resignations in government and some concern over the dreaded no deal scenario. Clients looking to buy Australian dollars could find some better opportunities on the horizon if a deal can be reached on Brexit, but we are still probably a few months away from such an outcome.

For assistance in making transfers either buying or selling Australian dollars at the best rates then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Poised for Volatility after US Tariffs are Enforced (James Lovick)

The Australian dollar is now set for a volatile period after US trade tariffs on Chinese goods kicked in this morning as planned. The Australian dollar as a commodity currency is likely to be sensitive to any further escalations in these trade wars and the dollar could come under considerable pressure. $34 billion worth of tariffs have been imposed as of today and China has already reciprocated. US President Donald Trump has signalled his intent to increase these tariffs to as much as a staggering $450 billion on Chinese products if China retaliated.

It will now be interesting to see the response from the US after this retaliation and where this heads next. The EU has also been embroiled into these trade disputes highlighting how big an issue this all is. If global economic growth falls in the future then the Australian dollar is likely to be one of the hardest hit.

GBP AUD

Today marks a hugely important today for those clients looking to buy or sell Australian dollars with pounds. British Prime Minister Theresa’s May will be holding a cabinet meeting at Chequers to finalise the detail on Brexit and how close Britain will be aligned to the EU. There has been much disagreement within her cabinet and today should give guidance as to whether Britain will pursue a soft or a hard Brexit. The pound is likely to react accordingly and this meeting does have the potential to cause some fireworks.

No details have yet been released but the outcome of today’s meeting will form the basis for a white paper on Brexit. A softer Brexit that maintains trade and one that is likely to be agreed by the EU is likely to see the pound rally. However any resignations or objections from within government could create even more uncertainty for sterling exchange rates. Clients would be wise to plan around this event as we could finally be at the tipping point.

For more information on the Australian dollar and for assistance in making transfers at the opportune time then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Outlook Improves (James Lovick)

The Australian dollar could be set for a stronger period ahead following a series of better economic data helping support the Aussie. Unemployment data released this week arrived better than expected at 5.4% against consensus of 5.5% proving beneficial for the dollar. There is hope that the improvement in the labour market should start to feed through into higher wage growth which is something the Reserve Bank of Australian have been waiting for. The Aussie was also boosted on the back of higher consumer inflation expectations which are pointing to higher prices down under going forward. The data suggests that Australians expect prices for goods and services to climb higher and this is yet another key criteria the RBA are monitoring before any decision is made on potentially raising interest rates. Looking forward the dollar could see a better period ahead and clients looking to sell Australian dollars may see a good window to convert within the next couple of months.

Next week sees the RBA minutes for the meeting earlier this month and may offer clues as to the central banks thinking. Any suggesting the conversation is moving towards raising rates would be seen as good for the Aussie.

The US are widely tipped to impose more trade tariffs on China imminently and this could happen as soon as today. Australia for the moment appear to be relatively protected for this action due to the strong trade ties it has with China.

GBP AUD

There are two major drivers for the GBP AUD pair at present. Clients looking to buy or sell Australian dollars should be aware of the Bank of England meeting next week as any change of tact from Governor Mark Carney could see the pound react. Any suggestion a rate hike could happen in August is likely to see rates for GBP AUD rally. Perhaps more importantly the Brexit withdrawal bill goes back to the House of Lords on Monday after there has been some disagreement in government as to the final wording of the text. This could prove tricky for the Prime Minister and any political tensions here could see the pound come under pressure. My long term view of GBP AUD is for considerable strength so sellers may wish to strike whilst the opportunity is still there.

For more information and guidance on Australian dollar exchange rates and for assistance in making transfers at the right time then please feel free to contact me at jll@currencies.co.uk

Australian Dollar after New Trump Tariffs (James Lovick)

The Australian dollar looks set for another volatile period after the announcement this afternoon for US tariffs to be imposed against the EU, Canada and Mexico. US President Donald Trump is moving forward with tariffs on steel and aluminium imports which could result in a trade war across the globe. The Australian dollar could see a period of weakness if this outcome materialises as the Aussie is a higher risk currency and generally performs worse in times of global uncertainty. Things could escalate quickly as the EU have made clear it will look to apply tariffs on American brands such as bourbon whiskey and Levi’s jeans. The US tariffs will take effect at midnight this evening so there could be some considerable volatility when the Australian markets open and a particularly volatile end to the week.

The Aussie did come under added pressure at the start of the week following developments in Italy which could have seen fresh elections. The outlook in Italy has improved throughout the week although it wouldn’t take much to see tension rise and an anti-establishment push from the two new parties seeking to form a government. Expect more uncertainty for EUR AUD on the back of developments in Italy.

Clients with a GBP AUD requirement should pay very close attention to what is happening in the UK with the ongoing Brexit. Whilst we may have been talking about it for over two years the process is about to become very interesting in these coming weeks as a vote on the Brexit withdrawal bill in the House of Commons approaches. There are whispers of a potential vote of no confidence in the government if UK Prime Minister Theresa May is defeated and this scenario could see major volatility for GBP AUD exchange rates. Clients looking to buy Australian dollars should plan around this event to avoid disappointment.

For assistance in making transfers either buying or selling Australian dollars then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Wobbles on Geopolitical Concerns – US / North Korea (James Lovick)

The Australian dollar has seen another wobble after that has been a good performance from the Aussie over the last month. The Aussie has slipped lower on the back of developments stemming from both China and North Korea. The trade war between the US and China appeared to be cooling off which was working in the commodity currency’s favour although Trump was reported to have said that “There is no deal” signalling that there might not be an agreement on how to reduce the size of the US deficit with China.

There are mixed signals coming out of the US on this important matter and there did appear to be progress up until recently. The Australian dollar is directly impacted by these events as China is Australia’s largest export market and a slowdown in the global economy is generally seen as bad for the Aussie.

It’s not just the US China trade battle to consider though, US President Donald Trump has indicated the summit with North Korea may not happen with a strong chance that it won’t work out. These geopolitical concerns continue to have a negative impact on the Aussie so expect more volatility for AUD exchange rates in the coming weeks.

Selling Australian Dollars for Pounds?

Those clients with pending requirements should monitor developments in Britain over these coming weeks. I have posted previously that the House of Commons will shortly vote on the Brexit withdrawal bill that has been put forward by the House of Lords with a series of amendments. UK Prime Minster Theresa may does not have a sufficient majority to push through her vision of Brexit and if the amendments are defeated in the Commons then there could be a vote of no confidence in the Prime Minister. This could create considerable volatility for the pound on the back of political uncertainty. It could also end up in a general election.

Clients looking to sell Australian dollars could see some better opportunities around the corner although it is my view the Prime Minister may have a shot at putting pressure on other politicians who represent Leave backing areas of the country. If she is able to win votes from Labour politicians then she could sail through with her Brexit which could see the pound rally on renewed confidence. Clients would be wise to plan around this event in these coming weeks as there is a huge amount at stake on how this ends up for GBP AUD.

To discuss your currency requirement and for assistance to achieve the best rates of exchange then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Gains Considerably against the Pound after Bank of England Holds Interest Rates (James Lovick)

The Australian dollar is seeing a volatile time and is continuing to come under renewed pressure having fallen against all of the major currencies yesterday. The Australian dollar has now dropped to the lowest level against the US dollar since June 2017. The reason for the most recent slide is really down to geopolitical concerns over the US pulling out of the Iran nuclear deal. With the perceived risk of escalating tensions in the Middle East this is proving negative for the Australian dollar.

The US dollar is strengthening as one would expect in uncertain times especially as the US dollar remains a safe haven currency. The flip side is that the perceive riskier currencies such as the Australian dollar do not perform as well with funds moving out of Australia. The outlook for retail sales in Australia is not looking too bright at the moment either which is also keeping the dollar at bay.

GBP AUD

The Bank of England held interest rates today as widely expected although the pound has fallen dramatically against the Australian dollar today with rates dropping below 1.80 for the GBP AUD pair. There is currently an excellent opportunity for those clients looking to sell Australian dollars for pounds. The Bank of England have cited Brexit uncertainty as reason not to hike after a poor run of economic data.

Those clients looking to buy Australian dollars with pounds could see some better opportunities to come although Brexit uncertainty could still prove to a burden for the price of sterling. Any wobbles here in the negotiations could see a drop for sterling although it must be said that the outlook on Brexit is starting to look considerably better and negotiations are now in the third and final round.

Over the water the Reserve Bank of New Zealand held interest rates last night but was interesting to hear is that the new Governor Adrian Orr signalled no desire to raise interest rates. In fact he cited inflation as too low and that it would need to rise to 2% before the central bank considered raising interest rates, something the bank does not foresee happening until late 2019. There are some similarities between the New Zealand and Australian economies as they are both commodity currencies and in my view this is a signal that Australia too is unlikely to hike any time soon. With no rate hikes on the horizon down under this is likely to be negative for the Australian dollar.

For more information on the Australian dollar and how to time your own transfer when either buying or selling Australian dollars then please get in touch with me at jll@currencies.co.uk

Australian Dollar Exchange Rates Slide on Weaker Global Economic Outlook (James Lovick)

The Australian dollar is under further pressure at present after the growth outlook for Australia is starting to be cut. Commonwealth Bank for one has lowered its growth forecast based on a slowing global economy. We have already seen the Aussie come under pressure since the introduction of trade tariffs imposed by the US and China. These decisions by these nations are now starting to feed through into the forecasts which should weigh heavy for the Australian dollar which generally performs well when the global economy is growing at a healthy pace.

Clients looking to sell Australian dollars don’t see a bright future in the short term although any positive noises and downplaying tariffs could see some relief for the Aussie. US President Donald Trump is keeping the markets guessing and does not appear ready to start putting the brakes on the tariffs just yet. Until this happens the Australian dollar could have further to fall.

The Aussie has made some small inroads against the pound this week although this is more to do with weakness in the pound following weaker UK economic data and uncertainty in the Brexit negotiations. UK Prime Minister Theresa May is in for a battle later this month when the House of Commons will vote on various amendments that the House of Lords have put forward which are aimed at keeping Britain within the single market and in some cases even with a view to keeping Britain in the EU altogether. What this all means is political uncertainty and it is politics which can be a major driver for exchange rates. Rates for GBP AUD could fall materially lower on Brexit uncertainty.

Only yesterday following a Brexit cabinet meeting the Prime Minister faced strong calls to ditch the customs partnership model that had been put forward and certainly keep Britain out of any customs union. A harder Brexit or no deal scenario cannot be ruled out and any heightening of tensions could see the pound tumble quickly. In my view there will be more twists and turns to come and this could present those clients looking to sell Australian dollars for pounds with some good opportunities to convert.

For more information on the Australian dollar and when to convert then please get in touch with me James at jll@currencies.co.uk

Australian Dollar Weakens on Uncertain Outlook (James Lovick)

The Australian dollar remains under pressure having fallen to a 4 month low following a decline in commodity prices including the price of metals. The US dollar has also seen a rise in US bond yields and this is something that impacts negatively on the Aussie. The Australian dollar has traditionally performed well when global investors have invested their funds into the higher yielding Australian dollar when interest rates have been considerably higher than in the US for example. The tide has turned now though after the US has begun raising interest rates and looks set to continue doing so throughout 2018. Funds have been moving out of the Aussie and back to the safety of the US dollar which has resulted in a stronger US dollar and a weaker Aussie.

The trade tariffs which have been imposed by the US and China also weigh heavily on the Australian dollar due to the wealth of raw materials down under and also considering the volume of exports that go to China. Any further signals that trade could slow down and impact negatively on global growth could see the Australian dollar weaken further.

In my view any progress on NAFTA which covers the trade agreement between the US, Mexico and China could end up having a positive impact on the Aussie if a positive trade arrangement can be reached. Pressure is mounting to have a decisions made by the time of the Mexican elections in the summer which could make for an interesting period ahead. Those clients looking to buy Australian dollars with pounds are seeing excellent prices available which are close to 1.85 for the pair. The Bank of England interest rate decision in May is also likely to throw up some sunrises and the rate hike that had been promised is no longer a certainty. In my view it is more likely the Bank of England will pause which could see GBP AUD come under some pressure.

For more information on buying or selling Australian dollars then please get in touch with me James at jll@currencies.co.uk