Tag Archives: GBP/AUD forecast

How will the Bank holiday affect buying Australian Dollar rates (Joshua Privett)

With the Bank holiday tomorrow trader’s like myself are gearing up for the irregular effects we have come to expect on buying Australian Dollar rates during this period.

The bank holiday is only in the UK, so whilst our financial institutions are closed, the rest of the world will be operating as normal.

Sitting on the sidelines is frustrating, and frankly based on most forecasts those using the Pound to buy foreign currency will see further frustration.

The main driver of the recent rally on the Pound, as well as a continued source of stability during a tumultuous period for the UK economy has been the UK stock market. 

This is the direct result of the Bank of England announcing a hefty increase in their quantitative easing programme to help stimulate the economy from the recent shocks. QE forces vast volumes of capital into UK financial markets in a bid to keep them ticking over – and this also makes them an attractive investment to outside buyers. Demand for them comes hand-in-hand with a natural demand for the Pound for the purchase.

However, with UK financial markets sidelined by the bank holiday one of the main pillars of value have been removed for the day. With little other data out to be released, we can expect a gradual reduction in GBP/AUD on Monday.

Luckily for AUD buyers however, losses will likely be overturned on Tuesday with the release of UK mortgage approvals and consumer credit figures for June. With fantastic retail sales figures for the UK, and stronger than expected housing market data last Tuesday, the consensus is for a strong showing for the Pound in this arena on Tuesday morning.

If you have an Australian Dollar buying requirement in the short-term and you wish to maximise the value of your Sterling holdings within that period, you can contact me over the holiday weekend on jjp@currencies.co.uk to discuss a strategy for your transfer aimed at maximising your AUD return.

With September just around the corner and the fresh bout of August performance data which markets are anticipating, a premium will simply be put on being able to move quite quickly should any tempting opportunities emerge.

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

Australian Dollar sellers can also get in contact to discuss the options open to you over the next few weeks with the improvements expected to increase the chance of buying at any peaks which emerge.

You can also contact me using the form below and I will respond to you as soon as I can.

 

Quiet period sees Sterling make minor gains against the Australian Dollar (Joshua Privett)

Markets are currently calming down after the surge of negative news which bombarded the UK economy during the first two weeks of the month, where buying Australian Dollar rates tumbled.

To summarise this was the lowest business confidence figures since the great recession which culminated in an interest rate cut in the UK economy, a fresh bout of quantitative easing, and slashed growth forecasts.

Now that the tirade has abated though, standard market forces of large scale buying of the Pound whilst it is cheap and we are seeing the Pound rise (albeit very gradually) due to this increased demand.

However, Australian Dollar buyers should be wary of this Friday where one of the few data releases over the next two weeks are expected – these are UK growth and business investment figures.

Both of these are expected to imitate the underwhelming (a nice way of putting it) data seen at the beginning of the month. Business investment has been siphoned away from the UK since the beginning of this year in the run up to the EU Referendum. There is a reason why investment in the Eurozone is 320% higher than the same time a year before.

As such Australian Dollar sellers may be presented with some further opportunities before this gradual rises may be re-introduced next week.

In the meantime AUD buyers may wish to approach the next few days as a chance to buy whilst the central level is still above 1.7. As many have seen even within a 24 hour period there are more opportune times to conduct a transfer, which is the proactive service which I offer to my customers.

If you have a buying or selling Australian Dollar requirement and I recommend contacting me on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximise your currency return.

I have never had an issue beating the rates of exchange offered elsewhere, and if you have a transfer later in the year, you can also fix any tempting exchange rates available now ahead of time to avoid the potential pitfalls.

You can also fill out the form below and I will be in contact as soon as I am available.

The Pound performs best against the Australian Dollar last week – what can we expect moving forward? (Joshua Privett)

Luckily for Australian Dollar buyers, they did not suffer the same fate as Euro and US Dollar buyers on Friday afternoon.

Speculative trends for profit taking on Friday afternoon has seen the Pound suffer recently, but commodity based currencies such as the Australian Dollar struggle to make the same kind of gains against the Pound as more traditional safe havens such as the US Dollar.

Therefore, the gains made for the Pound last week against the AUD were left largely intact as we entered the weekend. These gains were made despite strong employment figures released on Thursday in Australia, a surprise given the normally quieter winter months on this front.

More than twice the expected number of new jobs were added to the Australian economy last month, but this was totally eclipsed by the first piece of positive news for the UK in some time.

Firstly, inflation at the beginning of the week showed a slight rise after what has been nearly 8 months of decline. The reasoning behind this was shown on Thursday, when retail sales figures for the UK were shown to explode. 

A 6% increase reflected complete confidence in spending activity in the UK, and this healthier look as economic activity was reflected in the inflation figures.

After beginning last week moored in the mid 1.6’s, central levels are now back above 1.7. What can we expect moving forward?

With almost no performance information coming out of Australia, GBP/AUD rates will be entirely governed by UK performance information this week.

Data from the UK housing market will begin the week, which is unlikely to cause much of a stir as markets are already aware the situation is relatively shakey. The data would have to come in alarmingly below or above market expectations to cause much difference.

However, Friday should be seen as a red flag for anyone considering buying Australian Dollars, as UK growth and business investment figures will be released.

Growth forecasts have already been downgraded for the UK and expectations for investment are understandably down due to the current limbo established in the post-Brexit vote landscape.

The momentum is with the Pound, but AUD buyers should not expect massive gains this week, and we could see a downturn as early as Tuesday if housing data comes in even lower than expected.

It’s best to be in a position to move quickly in these situations should any tempting opportunities occur. If you have an Australian Dollar buying or selling requirement I recommend contacting me over the weekend whilst markets are closed on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximise your currency return.

You can also fill out the form below.

I have never had an issue beating the rates of exchange offered elsewhere, so in addition to help in planning your transfer, a brief conversation could save you thousands on an upcoming move, property purchase, or business invoice.

 

 

Positive inflation stems the Pound’s fall overnight (Joshua Privett)

Overnight some encouraging noises from the Reserve Bank of Australia’s most recent meeting minutes has since been overshadowed with stronger inflation figures for the UK economy, seeing the Pound rise against most of its currency pairings as a result.

GBP/AUD rates has been relatively stale since the beginning of the week, and the short bit of animation which resulted overnight was eclipsed within a few hours of markets opening in the UK.

The minutes themselves showed quite a confident face for the RBA instead of the morbid tones we have come to expect from them over the last 6 months as they try to talk down their economy in a bid to weaken their currency. This time their attempts were plainly caught out.

The monetary policy statement earlier in the month plainly stated that a resurgence in growth was unlikely to occur until 2018, but the minutes themselves showed a more optimistic tone of what each member of the RBA felt about the future outlook for Australia. In fact, most believed a return to the 4-5% growth figures seen a few years ago may be seen once more as early as next year. As such the Dollar rallied further against the Pound and almost broke through into the 1.66’s.

However, positive inflation data for the UK, the first time this side of 2016 that they have bettered market expectations, has allowed the scales to be balanced, and GBP/AUD central levels now reside back in the 1.67’s.

Moving ahead the next key data release for Australia will be their employment figures coming out overnight tomorrow. Given that the tourist industry is currently in a slumber during mid-winter, low improvements, if any are expected on the number of employed peoples, and certainly no change in the overall employment rate itself.

With the Pound having gained some momentum at an opportune point preceding what can only be described as a difficult data release for the Australian economy, Australian Dollar buyers may see some improved buying rates closer to the end of the week. As such a premium will simply be put on being able to move quickly if some more attractive levels emerge.

One of the more popular options surrounding such data releases are automatic purchase orders. Much of the currency market moves overnight either when those in the UK or Australia are asleep, particularly around key data releases. An automatic buy order means that if you have a target level you wish to achieve when buying or selling Australian Dollars, even if it reached for a few moments, this is secured for you before the inevitable market corrections we have come to expect (exhibit A being this morning’s see-saw effect detailed above).

I strongly recommend that anyone with a buying Australian Dollar requirement in the medium term should contact me overnight before the release on Thursday on jjp@currencies.co.uk. We can discuss a strategy for your transfer in order to maximise your Australian Dollar return.

Furthermore, those who have penciled in a purchase for later in the year can use an automatic buy order to pre-book their currency on any favourable opportunities which emerge. Essentially you can fix the price as it is on that moment for a small deposit, and then buy your full amount of Dollars at a date which suits you.

You can also fill out the form below and I will reach out to you as soon as I can to discuss the options open to you and formulate a plan of action on how best approach any transfers you have planned in the short to medium term.

 

 

Buying Australian Dollar rates collapse due to Friday trading patterns (Joshua Privett)

Friday had all the hallmarks of a stable day on the currency markets until the late afternoon, when buying Australian Dollar rates suddenly tumbled.

The Pound almost instantaneously took a serious hit against all of its major pairings. Buying Australian Dollar rates fell comfortably below 1.70, to their lowest levels since 2013 at one point.

The silver lining for anyone with an upcoming GBP/AUD requirement is that not only was this fall halted late on Friday by the close of the currency markets for the weekend, but this trend is also likely to be reversed as we enter the beginning of the new trading week.

In these situations it is important to always be aware that it is speculators who goven buying and selling Australian Dollar exchange rates.

Traders who move tens and hundreds of millions each day are the drivers of the currency markets and changes of exchange rates, and on Fridays you tend to witness the phenomenon of profit taking. These same speculative traders who had been active all week have to choose a dominant currency to store their profits into as the week concludes. Due to the instability and weakness of the Pound in this post-Brexit vote atmosphere, the Pound is in very low demand during this period. So its value becomes pressurised accordingly.

However, with Monday will become some return to normality. Traditional market dynamics dictate that when markets re-open, this artificial weakness for the Pound will be corrected as the market soaks up the readily available and cheap Sterling.

However, the world goes on, and Tuesday should be seen as a red flag for any Australian Dollar buyers, as inflation data for the UK economy will be released and this has been a regularly underwhelming time for the value of the Pound over the last 12 months.

Monday, therefore, may present some tempting opportunities ahead of what is expected to be a difficult day for the Pound.

I strongly recommend that anyone with an Australian Dollar buying requirement should contact me on jjp@currencies.co.uk to discuss how best to take full advantage of any tempting opportunities which emerge.

You can also fill out the form below to be immediately contacted at the opening of currency markets on Monday to discuss how best to make the most of the day’s movements.

Any profitable opportunities which emerge can also be immediately fixed in place for any planned future transfers. So a brief conversation to plan for your future could save you thousands on your transfer. I have never had an issue beating the rates of exchange offered elsewhere.

Australian Dollar sellers can also get in contact to discuss how best to maximise your Pound return within the timeframe you have to complete your transfer.

Buying Australian Dollar rates undercut further by Brexit (Joshua Privett)

It seems buying Australian Dollar rates have begun to take further hits, given that most thought the slide had halted following the decision to cut interest rates in the UK last week, the continued movement has been extremely surprising. This has created excellent opportunities for Australian Dollar sellers, and concerns for those considering buying Australian Dollars in the future.

The Pound has had a tough run of fortune since the beginning of this week. Date on industrial output, financial service growth, and house price stagnation has pointed to a 50:50 chance of a recession in the UK over the next 12 months.

In this current climate, this presents a double hurt for anyone considering buying the Australian Dollar.

The cut in UK interest rates last week has presented a disparity between UK based interest rates and other economies, most notably the Australian economy which now has an interest rate return 6 times higher than that of the UK.

However, even at the same time last year the UK had an interest rate of 0.5% whilst the Australian Dollar held a rate at 2% – so four times higher, yet buying Australian Dollars were still at 8 year highs. What matters here is context.

The Australian Dollar is normally seen as a riskier currency due to its heavy dependence on commodity prices for its value – so a higher interest rate doesn’t normally make it as attractive a currency to hold compared to more stable currencies. But this stumbling block is removed when the UK votes to leave the EU, and is why we’re seeing this starting to become telling and demand for the AUD is still increasing despite expectations that this would tail off.

In the medium term, with this immediate impact on the Pound, it seems like the pressure on buying Australian Dollar rates will remain. On a personal note I moved to Australia in 2009 when rates were even lower than they are currently, so there is certainly room for further falls.

In the short-term, as always in the currency markets, there are normally still opportunities to be found. Overnight tonight Chinese performance data across their retail and industrial sectors, as well as a measure on their foreign direct investment will be released – all of which are expected to show some stagnation in line with the dampening effect the announcement of the Brexit has had on global economic activity.

As such Australian Dollar buyers who have a requirement over the next few months may be wise to seize any opportunities which may emerge in the short term to cover the potential for any further losses.

I offer a very proactive service to notify anyone with a buying requirement of any favorable spikes or events to have on your calendar which may provide some profitable movements. There are also tools available through a specialist currency brokerage that allow customers to make the most of any fortunate improvements in exchange rates.

I have never had an issue beating the rates of exchange offered elsewhere, so feel free to email me overnight on jjp@currencies.co.uk or fill out the form below to discuss your requirements in more detail and develop a strategy for your transfer.

Joshua Privett – 01494 787 478

Buying Australian Dollar rates see confusion ahead of the weekend (Joshua Privett)

Yesterday evening’s results for the Bank stress tests across the 51 major banks in Europe, a widely anticipated event, actually caused confusion as to the value of the Pound against most of its major currency pairings, including buying Australian Dollar rates.

This something I have never seen before.

The results were released at 9pm UK time, which meant that only American markets were still open to trade on the news before the weekend closed, and this was only for an hour or so.

The concentrated activity within such a short space of time caused confusion on the most popularly used website and app in the world to check Australian Dollar and any major currency’s buying rates – XE.com.

The XE app suddenly went haywire and showed GBP/AUD up above 1.78, but this was never the case. Other websites never showed such movements, and the value of the Pound has since deflated back into the lower 1.7’s.

So what actually happened?

The Pound had a mixed bag. Most of the banks performed admirably and reflected the improvement of the government’s attempts ot make sure capital controls are in place to avoid another incident such as the Great Recession.

However, RBS, a bank 73% owned by the UK taxpayer since the Recession, was in the bottom 3 of the 51 banks tested. Apparently 7.5% of its capital would be wiped off the immediate event of a recession, and this seems to be the dominant news, especially given that the likelihood of the UK entering a recession in the next 12 months has increased in the post-Brexit landscape.

This is what contributed to the Pounds value and the fall on buying Australian Dollar rates.

With the Bank of England interest rate decision on Thursday, this mixed bag of data makes it difficult to know if an intervention would be needed – whether in the form of an interest rate cut or a fresh bout of quantitative easing.

The BoE remarks to the news highlighted the consistent performance of the likes of Barclays, HSBC, and Lloyds show a confident air in the UK banking sector. With this relatively stable picture presented, it now seems less likely that a cut may take place next week. There seems to be more breathing room to wait until their next meeting in September before taking drastic action.

Analysts had previously priced in an 80% likelihood of a cut, and current chatter now puts this down to 50-60%. We won’t know the exact figure until official reactions are published on Monday.

With the Australian economy having their own interest rate decision on Tuesday, and with a similar probability of a potential cut, the lack of consensus in the markets will warrant heavy movements next week. If you wish to gamble on the result of these helping your transfer, unfortunately you may need to consult a coin.

To completely remove any risk, Australian Dollar buyers or sellers may wish to move ahead of time to avoid any uncertainty or sudden movements against your favour.

However their are ways to manage your risk during this uncertain period and anyone with a buying or selling Australian Dollar requirement in the short term can email me on jjp@currencies.co.uk whilst markets are closed over the weekend to discuss these in more detail.

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

 

 

Interest Rate cuts are likely in both the UK and Australia soon, but which will have the biggest effect? (Joseph Wright)

Next week on the 4th of August the Monetary Policy Committee will make their decision as to whether to cut interest rates or keep them on hold.

This is quite a key date as Mark Carney has alluded to an interest rate cut as well as potential for further Quantitative Easing, and he did this in the aftermath of the Brexit vote. The MPC has had one opportunity already to cut the rate but opted not to, with the Pound spiking upward when that decision was announced.

Next week I am expecting a cut of 0.25% down to the 0.25% level, and this would be the first amendment since May of 2009. There’s a chance the GBP/AUD will drop in the event of this cut but not dramatically as markets are expecting it and some might argue that it’s already been priced into GBP exchange rates.

There is also pressure on the Reserve Bank of Australia to make a decision as to whether they will cut Interest Rates down to record levels in the short term future. A fall in the demand for credit down in Australia has kept their inflation outlook subdued, and I wouldn’t be surprised to see an interest rate cut for this reason.

I’m not expecting the rate cut in August but it is worth noting that the last time Australia cut the rate down to it’s current level of 1.75%, the Pound gained around 10 cents vs the AUD, and I think we could see another similar move so overall I think the reaction to an Australian interest rate cut will be greater, so it may be an idea for Aussie Dollar sellers to take advantage of the current near 3 year high levels sooner as opposed to later.

If you are planning to use GBP to buy a foreign currency it may well be 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.

Pound strengthens against the Australian Dollar after Friday’s falls (Joshua Privett)

We begin the week with GBP/AUD rates operating between the normal boundaries of little notable movement, with the Pound recording just over a cent of gains against the Australian Dollar from where we began the day.

The final two weeks of each month are normally devoid of economic data, so this is traditionally the ‘quiet’ period of the month. Yet due to the ripples caused by the Brexit result, whilst rates seem range-bound between 1.74-1.77, there is still significant movement each day. With less liquidity in financial markets this is largely inevitable.

Rates rose today with news that financial markets in the UK had stabilised following the poor business confidence figures released in the UK on Friday. Even BBC commented on the bizarre relationship that whilst the Pound strengthened stock markets in the UK fell. But this is simply another lesson that markets operate on expectation – if the market drops lower than expected, then much of the weakness already priced into the market will be released and the Pound will be allowed more breathing room.

The late announcement today of talks for a free trade deal with China so soon into the new Government’s efforts to re-stabilize the economy also helped to shore-up confidence. This strength may even filter into tomorrow morning’s trading with Asian markets still yet to trade on the back of the news as they were closed when the information was released.

It is difficult to gauge how markets behave during these quieter periods, but often movements are minimal andI think we can expect that quieter periods, with the Brexit out of the spotlight will allow some of the pressure on the Pound to be lifted.

Some further opportunities for AUD buyers may present themselves on Thursday morning in the UK with the release of inflation figures for the Australian economy overnight – market expectations are for a fall from 1.3% to 1.1%, and this confirmation may see the Dollar weaken further (adding fuel to the argument that there may be an interest rate cut next month) making it a cheaper prospect.

I strongly recommend that anyone with an Australian Dollar requirement, whether buying or selling, should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximise your currency return. I have never had an issue beating the rates of exchange offered elsewhere, so a brief conversation could save you thousands on your transfer.

Weak business data weighs on Sterling’s value, with further GBP weakness now likely (Joseph Wright)

Earlier this morning the UK released it’s first set of financial data since the shock announcement of the ‘Brexit’ decision.

The news released doesn’t bode well for the UK economy in the short to medium term, or Sterling strength for that matter as PMI figures for both Services and Manufacturing have shown a decline from the previous figures, with both demonstrating a contracting economy with the Manufacturing figures coming out worse than expected by analysts.

I put the declines down to simple uncertainty, with many tentative to put funds into UK business whilst the countries future remains unclear.

Moving forward I expect data such as this mornings new release to continue to weigh on the Pounds value, and I’m not expecting to see Sterling trading above 1.80 once again anytime soon, perhaps not even this year. Sterling sellers hoping to see the levels of 2.00 once again may be waiting for a long time, although a further cut to Australian Interest Rates could push the Pound up comparatively although the UK is also likely to cut interest rates, and that could occur as soon as August the 4th which would likely cancel out any potential gains for the Pound against the Aussie dollar anyway.

For Aussie dollar sellers, it’s hard to tell when the best time to trade will be as we are around 5-6 cents above the lowest level hit this year. For those not looking to take any risks it may be idea to take advantage of what are almost 3 year highs for the Aussie dollar.

If you are planning to use GBP to buy a foreign currency it may well be worth your time getting in contact with me (Joe) 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.