Tag Archives: GBP/AUD forecast

GBPAUD now comfortably trading above 2.00, further AUD weakness looks likely (Joseph Wright)

The current upward trend for GBP/AUD is yet to show any signs of slowing down, as once again today Sterling has far gained on the Aussie with the high of the trading day so far at 2.0388.

Sterling sellers are currently in a far better position now than just a few weeks ago as Sterling’s upward bounce has been significant and brought on due to a number of different factors.

The principle driver of GBP exchange rates presently is the predicted outcome of the EU Referendum next month. The relationship between the majority of GBP exchange rates and the predicted EU outcome is very straightforward, the less likely a ‘Brexit’ the stronger Sterling becomes and vice-versa.

The reason Sterling’s gains against the Aussie have been so magnified is become at the same time prominent UK bookies and pollsters are suggesting the ‘Remain’ campaign has gained a strong lead, members of the Reserve Bank of Australia have become increasing dovish regarding the economic outlook for Australia, whilst at the same time they’ve cut the Interest Rate down from 2.00% to 1.75% and hinted at further cuts in future, which has softened the Aussie’s value in general and particularly when compared with a surging Pound.

It’s worth noting that last night RBA Governor Glenn Stevens made it clear that the door is open for further monetary loosening in future, and his speech saw AUD exchange rates drop across the board.

Moving forward, I’m expecting Sterling’s gains to subside but I can see the pair leveling out and trading within the current range for some time. I think GBP/AUD 2.00 will act as a support and I don’t expect the pair to fall below 2.00 this month or next unless there’s a big swing in the ‘Brexit’ polls.

If you would like to discuss an upcoming currency exchange you plan to make involving Sterling and Aussie Dollars, feel free to contact me regarding my forecast. You can also take advantage of the high levels of security and award winning exchange rates offered by the specialist foreign exchange brokerage where I work, just email me (Joseph) on jxw@currencies.co.uk or call me directly on 01494 787 478.

GBP/AUD Rates Flatten Out Following Spike (Matthew Vassallo)

GBP/AUD rates have levelled out during Monday’s trading following last week’s Sterling strength. With a move through 2 last week it seemed as though the Pound may gather further momentum but the AUD has found support today, with the pair now moving back towards 2 by close of European trading.

The reason for last week’s GBP spike can be attributed to a couple of different factors but it was the most recent poll regarding next month’s EU referendum, that seemed to act as the catalyst. The poll indicated that we are now more likely to remain part of the EU and this immediately brought some market confidence back to the Pound. When you consider the general downturn in the Australian economy, it is no real surprise to see GBP/AUD drop but the key question now is whether this trend will continue to push Sterling’s value up, or is the upcoming referendum and in consistent UK data going to halt the Pound’s rise?

Personally I think the Pound would struggle to remain above 2 purely based on the current economic climate inside the UK but it is the problems in Australia which seem to be dragging the AUD’s value down. If this continues then we may find rates move settle between 2.05-2.10 over the coming days, assuming we hear no further reports that an Out vote is gaining support in the build-up to next month’s vote.

Personally I feel there is too much uncertainty in the market to gamble on any major Sterling improvement and with the markets moving simply off media reports than hard data, I would be tempted to secure any GBP/AUD position ahead of next months referendum.

If you have an upcoming GBP or AUD 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 on 0044 1494 787 478 and ask one of my team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Buying Australian Dollar rates tipped to drop back below 2.0 (Joshua Privett)

Buying Australian Dollar exchange rates have seen a phenomenal turnaround over the past month. Initial worries of dropping below 1.80 on GBP/AUD were replaced with near on 20 cent gains across 20 active trading days, culminated in last week where 2.0 was breached comfortably.

Both the news of Australia cutting interest rates, the call for an early election in June, coincided with some better performance figures for the UK economy, alongside a stronger showing for for the Remain camp during May’s Referendum polling data.

The turnaround is staggering. It took more than 50 trading days for GBP/AUD to make the falls since the beginning of the year to their absolute lowest point in March, which reflects just how abrupt and, frankly, tempting these current buying opportunities presented to Sterling holders are.

I wrote the above to also highlight the fickle and volatile nature of the current market is, and the pendulum may be swinging in the other direction from Friday of last week.

Polling data has now shown that both camps on the Referendum are now well within the margin of error, and the greater certainty that the UK will be staying within the EU is beginning to be eaten into. Particularly with heavy campaign season beginning to go into full swing -anyone who checks BBC news regularly will now be seeing at least one claim a day from both sides about the benefits or detriments of EU membership- markets will be beginning to look at these numbers with unease.

Whilst subjective, the overwhelming majority will note that a Referendum vote on the UK’s continued relationship with its largest trading partner will be the bigger factor on buying Australian Dollar exchange rates compared to the the upcoming election in Australia.

Furthermore, the most recent reports on the Pound’s two week positive run (not just against the Australian Dollar) have shown a strong correlation to the un-seasonally warm, albeit patchy, weather in the UK. Retail sales figures have climbed alongside employment, and even the Bank of England have noted that this recent stronger performance is not representative of what they are describing as a ‘stagnant’ British economy.

A look this week at growth figures will likely confirm this. Just to put this in context it was reported recently that growth figures for the UK economy during the first quarter of 2016 were out paced by the Eurozone. Data to be released on Tuesday of this week will likely confirm these figures from a second body, taking the recent positive narrative away from the Pound.

Indeed GBP/AUD was already sliding on Friday and briefly hit 1.99 before recovering back above 2. Anyone holding Sterling should seriously consider taking advantage of the recent gains for the Pound ahead of a very uncertain and even more volatile June. The conservative argument is that after the heavy gains made in May waiting for more is the greater gamble.

I strongly recommend that anyone with an Australian Dollar buying requirement should contact me on jjp@currencies.co.uk.

If you outline your requirement, alongside the time frame within which you plan to, or need to, complete your transfer, we can have a discussion to decide the best option open to you through a currency exchange specialist which would maximise your currency return.

I have never had an issue beating the rates of exchange offered elsewhere, and a brief conversation concerning your transfer could save you thousands.

Australian Dollar sellers can also get in contact, though my thoughts will sway more towards waiting to see how much the news next week reverses some of your losses over the previous month.

Sterling’s rally against the Aussie comes to an end, but for how long? (Joseph Wright)

Sterling’s bullish run against the Aussie Dollar has come to an end today with the pair trading down over half a percent.

Those watching the GBPAUD exchange rate will be well aware of Sterling’s recent rebound throughout this month, although whether or not the positive trend continues remains to be seen, and personally I think it may begin the fizzle out from this point onward.

The Pound had rallied heavily after the Reserve Bank of Australia (RBA) cut Interest Rates down to 1.75%, and that trend has continued since the decision after members of the RBA indicated that there could be further cuts. This had prompted many to call in and take advantage of Sterling’s unexpected gains as many were not expecting to see any Sterling strength in the lead up to the EU Referendum, which is understandable when we consider the negative effects political uncertainty can have on the underlying currency.

The reason for the rebound in Aussie Dollar strength today ties in with the recent interest rate cut, as those hoping for further AUD strength welcomed the news that some members of the RBA were reluctant to cut the rate, and this drove markets higher.

The relationship between Sterling and the Aussie Dollar is interesting at the moment as both are driven by weakness and for different reasons. Interest Rate cuts and hints at future cuts from the RBA and weakening AUD whilst sentiment towards the Pound is being mostly driven by the Pollsters. The bookies currently have a ‘remain’ vote in the lead and this is being reflected in Sterling exchange rates. Feel free to get in contact if you would like to discuss the relationship between the two.

If you have an upcoming or imminent conversion to make involving AUD, GBP or both it’s worth your time getting in contact with me on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible. You can also call in directly on 0044 1494 787 478 and ask for Joseph.

WIll GBP/AUD Rates Continue to Rise? (Matthew Vassallo)

GBP/AUD rates received a welcome boost with the pair gaining roughly 10 cents over the past month. This is a fantastic opportunity for those clients holding Sterling, considering how much pressure the UK economy is under at present. This pressure has been mounting for some time and with June’s EU referendum causing so much uncertainty, the fact an opportunity such as this has presented itself is even more surprising. The Pound has taken a hit against most of the majors but due to an equal amount of negative press and market uncertainty, the AUD has struggled to hold its position.

The Pound started to build momentum following the Reserve Bank of Australia’s (RBA) decision to cut their base interest rate to a record low of 1.75%. They left themselves open to further cuts if necessary and with the well documents economic problems in China also sapping investor confidence, the AUD is struggling to find a foothold under current market conditions.

In some ways it is somewhat fortunate for those clients holding AUD that the Pound has its own problems, otherwise I believe we would already have seen GBP/AUD rates move above 2. Just to put it in context the improvements seen over the past few weeks would equate to an extra 20,000 AUD on a £200,000 GBP/AUD currency exchange. Considering the potential pitfalls ahead for the UK, I would be extremely tempted to take advantage of the current spike ahead of further uncertainty for the UK as the upcoming EU referendum draws closer.

If you have an upcoming GBP or AUD 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 on 0044 1494 787 478. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Will GBP/AUD Exchange Rates Hit 2? (Matthew Vassallo)

GBP/AUD rates received a welcome boost for those clients holding the Pound, following last week’s decision by the Reserve Bank of Australia (RBA) to cut interest rates again down to 1.75%, a new record low. This immediately alleviated pressure on Sterling and the Pound made a sharp rise through 1.95 on the exchange, a key resistance level on the pair.

Despite the AUD finding support around the current levels, this morning’s high was 1.9803, clients will now be hoping that this recent momentum carries Sterling through 2, a key benchmark for many. Considering the on-going economic problems facing the Chinese economy and the current stance by the Reserve Bank of Australia (RBA), which has been to actively look to devalue the AUD, there is a strong argument in favour of this.

However, we do need consider that the Bank of England (BoE) are equally concerned about the rising value of the Pound and this is evident in their comments over recent months. The UK trade deficit remains too wide and this will only be narrowed if trade with a flagging Eurozone is boosted, another element of the economy the Leave party will argue will be enhanced by an Out of Europe vote. Despite their being no direct correlation between the EU referendum and the Australian economy, the result will certainly affect GBP/AUD exchange rates. If the UK does leave the EU then expect the Pound to come under immediate pressure and the AUD is likely to benefit as a result.

I do feel that the Pound is now likely to hold its position above 1.90 but we will need to see another shift in market perception in order for GBP/AUD rates to move above 2.

Momentum on GBP/AUD shifts to events in UK (Joshua Privett)

Events in Australia have always had the greatest sway on GBP/AUD exchange rates during the first week or so of each month. Due to the size of the economy and its population, performance figures are tallied more quickly and released into the marketplace ahead of the UK, with buying Australian Dollar rates shifting as a result.

This website has extensively covered how this recent data caused a total turnaround of 9 cents on GBP/AUD within the space of 10 days as everything that could possibly go right for Australian Dollar buyers emerged in a very short timeframe.

The announcement of deflation led to the quick-fire decision to cut interest rates as a preventative measure. This also coincided with the call for an early election next month which, by itself, would not normally cause much movement in the marketplace, but with the rapidly evolving financial situation in Australia, resulted in what can only be called a panic on the currency markets.

These movements have since slowed, and this is because it is now the UK’s turn to post their performance figures form April, and Australia Dollar buyers should soon be reminded why GBP/AUD fell by 26 cents since the beginning of this year.

Today Industrial Production figures will be released by 9:30am BST and the Pound is already trending slightly lower as a result against the Australian Dollar, Euro, US Dollar and New Zealand Dollar. This lack of confidence stems from the on-going steel crisis in the UK, and news at the end of April of confirmed slower growth in the UK for the first quarter of 2015, slower even than that of the Eurozone.

Tomorrow will also bring one of the most important days on the UK calendar for the month, our own interest rate decision. A cut is not expected, but the UK is having its own issues with low inflation as well. With a new member on the Monetary Policy Committee, it may be that for the first time in 13 months, one of the members will be voting for a rate cut.

Certainly I would not be surprised, since for the past three months not one of the 9 members has voted for a hike with Pound weakness being the result.

With the upcoming Referendum as well, risk has once more begun to outweigh this short interlude of opportunity for Australian Dollar buyers.

I strongly recommend that anyone with a Australian Dollar buying requirement should contact me today on 01494 787 478 and ask the reception team for Joshua in order to discuss the options open to you through a currency exchange specialist to maximise your Australian Dollar return.

I have never had an issue beating the rates of exchange offered elsewhere, and these current buying levels presented after these recent events can actually be fixed in place ahead of any future requirements, allowing you to plan ahead for a purchase even half a year in advance or as little as a few weeks.

Australian Dollar sellers can also get in contact. I firmly believe the current rates of exchange are artificially inflated and what was available only a few weeks ago is much more representative of where GBP/AUD rates should be. Contact me on jjp@currencies.co.uk to discuss how to buy at any more attractive levels which emerge later this week as soon as they become available.

 

RBA’s Stance Likely to Handicap the AUD (Matthew Vassallo)

The AUD has found life tough going of late and with the Reserve Bank of Australia (RBA) actively looking to drive down the price of the AUD, as they feel it is currently overvalued and having a negative impact on Australia’s export industry. They recently cut interest rates and have left themselves open to a further cut should it be required and this has led to a complete lack of confidence by investors in the Australian economy.

GBP/AUD rates have risen by over 3 cents during Friday’s trading, providing some of the best buying opportunities we’ve seen this year. It was announced overnight that RBA governor Glenn Stevens will be replaced by Deputy Governor Philip Lowe and this changing of the guard, coupled with poor data from China and the RBA’s general stance has caused the AUD to weaken, with investors looking at the UK as the ‘safer bet’ under current market conditions.

Despite this positive move I would be wary about putting too much confidence in the Pound, which is still likely to be handicapped by the ongoing uncertainty surrounding the EU referendum in June. I do not expect any sustained support under current market conditions. We need to consider the reality and that is investors have little or no risk appetitive due to the on-going negativity surrounding the UK recovery. The Bank of England’s (BoE) recent stance has been to talk down facets of our economy and this has been reinforced by a run of very inconsistent economic data. With growth forecasts likely to remain weak for the remainder of 2016, I do not expect to see GBP/AUD rates to hit the dizzy heights of last year, when the pair was trading comfortably over 2.20  for an extended period of time.

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 to deliver volatile beginning to May (Joshua Privett)

GBP/AUD rates saw a very sudden and unexpected turnaround last week following the revelation of deflation in the Australian economy.

Prior to this, buying Australian Dollar rates have been seeing a very gradual and medium-term decline since the beginning of the year.

The reasons why are rarely as visible to markets as they have been in this instance, which is why GBP/AUD has not seen a significant turnaround until now.

Politically the UK has made the Pound an unattractive prospect for months, with a looming Referendum continuing to make investors turn their nose up at a Pound which is likely to continue losing value in the run-up to June.

Economically the UK has also posted very underwhelming performance figures. Growth is down by a third compared to the final quarter of 2015, whilst Australia has been enjoying the benefits of a record tourist season, a stabilising China, and a rebound in the commodities market.

This sudden turnaround in GBP/AUD frankly, given the above disparity between the recent performance of the UK and Australian economies, does seem to be an overreaction from the marketplace. Particularly given that globally economies are having issues with deflation, it is almost a universal problem.

The likely reason for this market overreaction can be found in the announcement of Australia’s interest rate decision on Tuesday, which has markets nervous.

Mentions of cuts have been thrown around half-heartedly, but with this new announcement of deflation, financial markets may be concerned about intervention to protect the economy. Cuts normally result in the loss of value for a currency, which explains the rise on GBP/AUD buying rates last week.

I do not expect a cut to take place. This is something that Glenn Stevens (Reserve Bank of Australia Governor) has been discussing periodically for over a year. He didn’t deploy this at the height of the problems over in China which were causing much more serious concerns for the Australian economy in August last year or January at the beginning of this year, and this makes it unlikely he will revert to such extreme measures now.

Frankly, the drop in prices can be explained largely due to the dialling down of the tourist season. But even if Stevens was worried, his previous behaviour has shown he is unlikely to act on impulse, and will almost surely wait to the following meeting of the RBA in June before seriously considering any cuts.

With the above in mind, this recent rise on GBP/AUD exchange rates should be seen as a gift for Australian Dollar buyers. Particularly since rates were close to the 1.70’s just last week than the 1.90’s.

I strongly recommend that anyone with an Australian Dollar buying requirement should contact me on jjp@currencies.co.uk over the weekend whilst markets are closed to discuss a strategy for your transfer in order to maximise your Australian Dollar return.

Despite the lack of conviction for a cut, the opening of trading next will still present a nervous market with plenty of volatility, and therefore opportunity.

There are a number of options available through a currency exchange specialist which allow you to secure any peaks which occur immediately, to avoid missing out on these potential opportunities whilst you are otherwise engaged.

I have never had an issue beating the rates of exchange offered elsewhere, and a brief conversation about your options could save you thousands on your transfer.

Australian Dollar sellers can do the same, and I can how best to ride the expected movements in your favour to their peak within the time period you have to complete your transfer.

Buying Australian Dollar rates see serious spike (Joshua Privett)

GBP/AUD rates moved back above 1.90 overnight following incredibly low inflation figures for the Australian Economy. Buying rates for Australian Dollars are now at 6 week highs following what had been a sustained negative run on GBP/AUD since the start of February.

Waking up to the news and saying this was a surprise is an understatement.

Inflation rates are a key indicator to the health of an economy and current spending activity, and these are largely used to inform interest rate decisions by the likes of the Reserve Bank of Australia.

The potential for a cut in rates has been on the cards for a while, but for more than 10 months this is something which was talked about but never acted on. When markets saw that inflation levels turned negative for the first time this year at -0.2%, rather than the stable 0.3% expected, this caused concern that this may be revisited once more.

However, I feel that markets have overreacted heavily to the news.

Similar to the UK who recently had an improvement in inflation due to an early Easter creating increased prices for air fares (skewing the data released in a more positive direction), with the Australian economy winding down from the high tourist season this is likely the same reasoning behind this sudden fall.

The Australian economy has been performing very well in most other areas which are reflective of a more stable trading partner in China and a boost to the commodity markets from their absolute lows in February.

Frankly, buying rates for Australian Dollars would have improved even further if the news about the UK’s poor growth in the first few months of this year hadn’t balanced out the weakening effect on the Australian Dollar throughout the day.

Rates were already starting to trickle down from their highs as trading continued into the afternoon, and with the Referendum coming into greater focus in May, Australian Dollar buyers may be wise to seize these recent gains, bearing in mind that as GBP/AUD rates were touching on the 1.7’s a very short time ago.

I strongly recommend that anyone with an Australian Dollar buying requirement should contact me on jjp@currencies.co.uk in the wake of this sudden turnaround to discuss a strategy for your transfer in order to maximise your Australian Dollar return.

I have never had an issue beating the rates of exchange offered elsewhere, and even if you do not require your Australian Dollars for a few months this current gift on the currency markets can actually be fixed in place ahead of any future transfers, to avoid the expected falls as we edge closer to the Referendum.

I will reply personally following the opening of markets tomorrow morning detailing what the expected trends are for the day and whether any peaks may still be expected. Simply detail your requirement, and the best number to reach you on, and we can have a brief conversation in the morning which could save you thousands of Pounds.

Australian Dollar sellers can do the same, and we can have a conversation about how this recent movement has effected any short term plans you may have and how these can be managed.