Tag Archives: GBP/AUD forecast

Will the AUD Recover? (Matthew Vassallo)

The AUD has had another volatile trading week, as the economic problems in China continue to mount. The well documents crash in the Chinese stock market has triggered a state of global panic and due to the trade ties between Australia and China, this has shaken the Australian economy and ultimately dragged down the value of the AUD.

This has caused the AUD to dip against all the major currency pairs but in particular against Sterling, with the pair reaching 2.21 on the exchange earlier this week. These were some of the best buying opportunities clients who were holding GBP had seen in the past 8 years, although the opportunity was short live with the AUD finding some support over the past 12 hours.

The reason for this improvement can be attributed to the strong construction data released overnight, which came in far better than anticipated. This helped to push the AUD’s value up, with GBP/AUD rates moving back below 2.16 at today’s low. Personally I see this as a short-term opportunity which has presented itself and if feasible, should be taken advantage of. I just cannot see any sustained improvement under current market conditions and with the economic problems in China likely to continue over the coming months, we could find the AUD continues to come under pressure during that period.

It’s been a quiet week for data releases, so all eyes will switch to next week’s Reserve Bank of Australia (RBA) interest rate decision. RBA governor Glenn Stevens will be pleased to see the recent devaluation of the AUD as it will help to facilitate an improvement in exports but may be concerned with the situation in China. He has already stated that the RBA will cut interest rates again if necessary, so it will be interesting to see what stance the central bank take next week.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

Chinese economic data causing global distortion (Joshua Privett)

Worsening news and data coming out of China has sparked a mass sell off of shares on the global stock-markets at the start of trading this morning. Last week the AUD lost significant value for this reason, alongside other commodity based currencies.

The mass sell off of shares has also hurt financial centres such as London, so luckily those looking to sell AUD for Sterling have only lost a Cent or so, much less than the overall devaluation of the Australian Dollar, now that global growth forecasts have been revised downwards for a longer period than previously expected.

Those with AUD to buy have just seen fresh 7 year highs to purchase on the markets, and I would be inclined to take advantage of this movement, as GBP/AUD has already corrected this morning from 2.17 to 2.15 in the space of 30 minutes.

Call me on 01494 787 478 and ask for Joshua for a free quote on your transfer. Alternatively email me on jjp@currencies.co.uk for tailored advise on your situation, particularly if you have Dollars to sell in the next few months.

When should I buy AUD? (Daniel Johnson)

Despite Sterling taking a knock against most major currencies this morning. GBP/AUD is still remaining around the 2.13-14 mark. This is more to do with AUD weakness than Sterling strength. Chinese factory orders came in during the night and were well below par, China’s growth is slowing considerably and due to Australia’s heavy reliance on raw material exports to its Asian neighbors AUD is taking a hit.

There are rumours of  a rate drop by the RBA but I don’t feel this is solution to Australia’s economic problems. If it is to happen I would expect it much further down the road. If you had an AUD requirement I would be looking to move when GBP/AUD hits above 2.14 as we are seeming to hit a resistance level at 2.15 due to profit taking.

I am offering a free rate alert service to notify potential clients of any spikes or troughs in the market. feel free to drop  me an email if you would like to take advantage of this service. Please be sure to include your requirement, what are you hoping to achieve and time scales.

Thank you for reading today’s Blog, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than than happy to assist you with any of your currency requirements. Feel free to e-mail me on dcj@currencies.co.uk or call on 01494 787 478 and ask for Daniel Johnson.

GBP/AUD spikes up on UK inflation (Joshua Privett)

GBP/AUD rates have been marred around the 2.10 region, with strong Australian employment figures and a small rise in commodity prices contributing to AUD strength.

Sterling received a boost this morning from stronger inflation figures than expected. One of the main factors currently delaying an interest rate rise in the UK is its record low inflation, and dipped down last month into negative territory for the first time since records began in 1960. Now that this rose by 0.1% last month alone, investors are more confident and have bought Sterling in the expectation of a rate rise to be sooner than expected.

This is a nice boost to GBP/AUD rates which are now above 2.13 but the general trend recently has been pointing in the opposite direction. The volatility and unpredictability for commodity based currencies are unsurpassed. In Canada for example, invested funds were expected to leave the country at a rate of 5bn Dollars per month, and instead a further 8bn was invested in the country by foreign investors, causing the CAD to gain 2 cents against the Pound on yesterday’s trading.

As such many investors are still seeking to buy AUD while it is cheap and hope for greater returns later when commodity prices rise. This is what is holding down GBP/AUD rates so those looking to buy AUD should look to take advantage of the significant move in their favour this morning.

For a free quote call 01494 787 478 and ask for Joshua, I guarantee that my team can beat any rate offered by your bank or a rival brokerage. Alternatively email me on jjp@currencies.co.uk for some personal advice on any planned transfers over the next few months.

 

GBP/AUD Rates Remain Volatile (Matthew Vassallo)

GBP/AUD exchange rates have remained volatile of late, with aggressive short-term spikes in both directions. The general trend is still Sterling positive but the AUD has found support around the current levels, as we saw earlier this week when the AUD started to put pressure back on 2.10.

Unfortunately for the AUD I cannot see any sustained improvement against the Pound under current market conditions. Whilst the economic instability in China continues the AUD will struggle to gain value, due to the intricate trade links between China and Australia. With political opinion also divided in Australia, many are blaming the current demise of the economy on the Australian government, it is difficult to see a short-term improvement for the AUD.

Australia is primarily a commodity based economy and they rely heavily on the exports of their vast supplies of raw materials, so when exports drop it is always going to hurt their economy and is one of the prime reasons Australia is trying to extend its trade arms, so they are not as reliant on China.

Personally I would be tempted to sell AUD even around the current level and not gamble on what is becoming an increasingly volatile market.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

GBP/AUD rates boosted as China takes action to weaken its currency (Joshua Privett)

You can always tell when economic events come in unexpectedly on the markets, otherwise the 3 cent shift would have happened gradually over 2 weeks, rather than a single morning of trading. UK markets are not even open yet, but trading in time zones ahead of us have already boosted GBP/AUD rates up to 2.13, but have since settled to 2.12.

The reason for this is the surprisingly cautious action taken by the Chinese, who are now actively attempting to devalue their currency. This is a measure to protect their economy from its current slowdown. Historically, China has compensated against any signs of stagnation through increased state spending (usually domestic infrastructure). Such a significant change in policy suggests diminished reserves of state capital.

If the Chinese do not have the reserves to spend internally, then forecasts for external spending on imports are hit just as badly. Hence the AUD weakening immediately in just a few minutes.

Surprises like this are few and far-between. I am still inclined to believe that rates will likely recovery, and have been in recent weeks until this overnight announcement. Those looking for a quote on GBP/AUD transfer should call 01494 787 478 and ask for Joshua to receive a free quote and tailored advice on your situation. jjp@currencies.co.uk

What next for the Aussie Dollar?

The Australian dollar continues to be pushed back against the major currencies like the US dollar and sterling as these currencies find strength on the back of improvements in their respective economies. Whilst the Aussie had strengthened from the decision by the Reserve Bank of Australia to not cut interest rates, this was shortlived and in particular against sterling those moves had been very quickly eradicated as investors feel cuts are on the horizon.

Just when such a cut will be is difficult to tell but with continued uncertainty in China and the pound rising it appears if you are going to be looking to sell the Aussie for the pound moving sooner rather than later is the best course of action despite being very painful. The market is pricing in UK interest rate rises and Australian interest rate cuts. With such a scenario likely to play out in the next couple of years it is difficult to see this pair staging the recovery that many selling Australian dollars might be wishing it would.

For more information on the best time to exchange AUD for pounds or indeed Euros please email me Jonathan on jmw@currencies.co.uk

GBP/AUD Best Rates – On the verge of falling through 2.10 (Joshua Privett)

GBP/AUD rates fell away from the recent 7 year highs dramatically during trading today, following the overnight announcement (UK time) of the decision to keep interest rates at their current levels.

Markets were expecting a move to cut the base level of 2% interest in the Australian economy, as a pre-emptive measure to shield their economy from the harmful affects of  an economic slowdown in China and a collapse in commodity prices.

This expectation that interest would be cut was what had driven rates up to highs of 2.14 we have enjoyed over recent weeks. Now GBP/EUR rates have fallen over 3 cents following the Reserve Bank of Australia’s decision not to act, with markets realising they were wrong to make such an assumption.

Additional data released overnight also highlighted positive developments in the Australian economy. Retail sales figures for July came in at 0.7%. These are normally quiet months for the Australian retail sector as their winter makes tourism a less lucrative industry. Such an increase, particularly when only a small rise of 0.2% was expected, certainly contributed to GBP/AUD rates testing the 2.10 boundary. Such spending habits shows significant domestic consumer confidence, which in turn inspires confidence in the Australian Dollar.

In the early hours of Thursday morning in the UK, employment figures will be released for the Australian economy. This has been an improving figure over the past few months. The increase in retail sales may signal that a few more of the unemployed have been soaked up into the labour market and have money to spend. As such I would not be surprised to see further AUD strength as we progress into the first week of August.

Those with AUD to buy and were holding out for highest rates have lost out unfortunately. It is very difficult to buy at the high of the market, particularly when that high is purely based on market psychology rather than concrete economic data. I expect rates to fall towards the end of the week and settle around 2.07/8.

These rates are nothing to sniff at and you are still buying very close to 7 year highs for GBP/AUD rates. Email me overnight to discuss how to maximise the value of your Sterling before data releases move against your favour further.

Even if your requirements are not until later in the year, these favourable buying rates can be pegged at no additional cost. jjp@currencies.co.uk

GBP/AUD Rates Drop Following RBA Interest Rate Decision (Matthew Vassallo)

GBP/AUD rates have dropped sharply during Tuesday morning’s trading, following last night’s Reserve Bank of Australia (RBA) interest rate decision. GBP/AUD rates have fallen by over 3 cents following the RBA’s decision not to cut their base rate from 2%, a move that was widely anticipated amongst investors. When this did not occur it brought some market confidence back to the AUD, as investors will have taken this as an indication that the Australian economy is performing better than expected.

There was also further positive data overnight in the form of Australian Retail Sales figures, which came out at 0.7%, which was much improved on the expected figure of 0.4%. This has transpired to boost AUD rates and due to the volatility of the currency pair, it is no real surprise to see the rates move so quickly and aggressively.

This is another prime example of why it is important to stay in touch with a personal currency broker who can make you aware of such spikes, so these windows of opportunity, whether you are buying or selling, are no missed.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

GBP/AUD Forecast (Matthew Vassallo)

GBP/AUD exchange rates have dipped slightly during Friday’s trading but the pair is still sitting very close to a 6 year high. Sterling’s momentum over the past couple of months has come in line with an upturn in UK economic data and I do not see a major shift in market conditions in the short-term.

The Australian economy seems to have caught the back end of the global crisis, when for a time it seemed almost immune. A major catalyst for the start of its decline was a gradual fall in the export of its vast supply of raw materials and as regular readers will know this is a key component of Australia’s economy. Without this the extremely high labour costs of their mining sector, along with other facets of the economy start to become a burden and we’ve seen over recent months how quickly the AUD can lose value.

Personally I feel that regardless of short-term spikes in the market the Pound will continue to find support above 2 on the exchange but whether we see another major spike for Sterling will depend on the Bank of England’s stance and whether we hear further talk of an interest rate hike.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk