Tag Archives: GBPAUD

US China Trade War Intensifies (Daniel Johnson)

AUD losing investor confidence

Australia is heavily reliant on China purchasing its goods and services. Any fall in Chinese growth has a knock on effect on the Australian economy and in turn the Australian Dollar.

The US China trade war is a serious concern for investors and it is pushing them away from riskier commodity based currencies such as the Australian Dollar. The US and China are currently in talks and the Trump administration wants China to make fundamental  changes to its current economic strategy.

If China were to make some of the changes requested it would have serious implications on the Chinese economy. Chinese President, Xi Jinping knows this and it may be the case that he will try to make as little concessions as possible in an attempt to outlast Trump’s reign.

It is a risky game considering the US has threatened to increase tariffs by 25% on $200bn worth of goods. The US has said they will implement the tariffs if the two sides fail to make progress by 1st March.

According to a UN trade agency report Asian countries would be the most effected. The implications of such an increase should not be understated. With two super powers trading blows the effect will be wide reaching and will hit the global economy.

The Australian Dollar could be among the hardest hit until we have a resolution, which could be some way off, AUD will remain fragile.

If it were not for the lack of clarity surrounding Brexit I think we could see some decent gains for Sterling against the Aussie, unfortunately the uncertainty over Brexit is outweighing concerns down under and the Pound continues to be anchored at low buoyancy levels. There are alternative options to May’s deal being put forward, but there is still no firm way forward. May’s intention is to gain concessions from Brussels that will be accepted by parliament. She has already attempted to this in December after delaying the initial vote. May was stone walled by Brussels and European Commission President, Jean Claude Junker has continually stated there will be no concessions made. Many still believe a deal may be struck at the 11th hour, but Brussels have stuck to their guns up until this point. The PM is currently in a worse position than in December following the diminishing probability of a no deal scenario (one of her only sources of ammunition) with Morgan Stanley predicted there is less than a 5% chance of a No deal Brexit.

If you are looking to move GBP – AUD short term aim for the 1.83s.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavour to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 18yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

 

 

 

Australian dollar at the mercy of global news!

The China – US Trade Wars have been a major factor driving the currency markets in the last 6-9 months, impacting the Australian dollar and the economy. Australian economic data has been mixed but with Chinese data reflecting a slowdown, particularly in Manufacturing, the Australian dollar has been softer.

Looking ahead there is lots of important news in the currency markets this week to move the Australian dollar, this includes information at home and abroad. Domestically we have the latest Australian CPI, Consumer Price Inflation, data to move the market. The Australian economy has been mixed and investors are still debating the prospect of interest rate hikes in the future.

Tomorrow is also important with the latest US Federal Reserve interest rate decision, which could be a market mover on the US dollar and thereby impact the Australian dollar. USDAUD is the most heavily traded pairing for the Aussie and any large movement on the USD can ‘weigh’ the Australian dollar down against other currencies.

Later this week we have the latest US-China trade war talks which could be a market mover in the future, clients with any AUD transfers should be keeping a very close eye on the latest news. The meeting this week might yield too much news since there is still a 1st March deadline for the talks to be finalised.

Finally, Friday is the latest US Non-Farm payroll data which might well trigger volatility on the Australian dollar, by altering global attitudes to risk and viewpoints on global trade. Clients looking to buy or sell the AUD should be very conscious of these developments which should see a very busy end to the week for the Australian dollar.

If you have a position buying or selling and wish to get a fresh update o the market and all the important issues driving your levels, please do get in touch to discuss the latest news with me Jonathan Watson.

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

Jonathan Watson

jmw@currencies.co.uk

US-China Trade War and Brexit dictate GBP/AUD (Daniel Johnson)

Pound Value hinges on Brexit Deal

Brexit is anchoring the Pound against the majority of major currencies due to the lack of clarity surrounding Brexit. The current situation is not a good one, May’s deal in it’s current form seems to have little chance of being passed by parliament. The lack of faith in the deal going  through was the reason the vote has now been delayed. Parliament reconvenes on 7th January and the vote will be held on the week commencing 14th January.

The 21st January is the final date the government can release it’s withdrawal plans. The majority of the possible outcomes I would largely consider Sterling negative. Jean-Claude Junker, President of the European Commission has stated that the deal on the table will not be renegotiated and that Brussels are only prepared to clarify the current terms of the deal. In it’s current form the deal does not look like it will go through which would hurt Sterling.

If the deal does not go through it is likely May will face  a leadership challenge from Corbyn or May could resign,  if this was to be the case the further political uncertainty would hurt the Pound. If May is ousted a General Election will be on the cards which does not bode well, but does bring a second referendum back to the table. If a second referendum is announced this could be deemed as pound positive as polls suggest the UK public would now vote to remain in the EU.

A no deal scenario would be the most damaging for the Pound although I am not of the opinion the losses will be as severe as the Bank of England have been touting. Carney suggested there will be over a 25% fall in house prices and GBP/EUR could drop below parity.

US-China Trade War could be prolonged

The US-China trade war continues to weigh on investors mind and many have moved away from the Australian Dollar due to Australia’s heavy reliance on the Chinese purchasing it’s goods and services. The current 90 day truce is in place provided China come to the table to negotiate over their current economic model. I am doubtful any major concessions will be made and the trade war could be prolonged which will hurt AUD. We could see an escalation if sufficient concessions are not made with the US threatening to increase tariffs on Chinese goods by 25%. This would hit both economies hard and also would cause further global economic uncertainty. If it were not for Brexit I think we would be seeing gains for Sterling against the Aussie, but at present the lack of clarity surrounding Britain’s future is holding the pound back.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavour to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving.

If you would like my help feel free to email me at dcj@currencies.co.uk.
Thank you for reading.

Is now the time to sell Australian dollars and buy Pounds?

Its been a roller coaster ride for Pound v Australian dollar exchange rates over the last month. GBPAUD exchange rates have ranged from 1.8750 to 1.78 a 5.3% fluctuation. To put this into monetary value, a well timed transfer could have generated clients an additional 19,000 dollars on a £200,000 transfer.

Brexit related news has been the main driver and at present GBPAUD exchange rates are back on the rise as the EU have hinted that they are willing to offer Theresa May an ‘independent mechanism’ deal. The news comes before Theresa May meets with her cabinet today to give an overview of current negotiations.

The independent mechanism review will be the hot topic as the UK and EU try to come up with a way to keep the borders open in Ireland,. However rumors have emerged surrounding Brexiteers including her own Brexit Secretary Dominic Raab, that his resignation will come if within the deal the UK cannot leave the EU on demand.

The upcoming weeks are going to shape GBPAUD exchange rates for years to come. At the moment the pound is on the frontfoot as a deal is looking more likely, however clients converting GBPAUD should expect the unexpected. My personal view is that a deal will be struck next month at the European Council meeting on the 13-14th and therefore the pound will make considerable gains against the Australian dollar.

For people that are new to currency exchange and are planning a transfer involving the Pound v Australian dollar, now is the time to get in touch even if you are not needing the currency until next year. As a company we can keep you updated with regular economic information and events which can help you prepare for your transfer.

However for people that are converting Australian dollars into Pounds, quite simply I believe now is the time. If a deal is struck we could see GBPAUD head back towards Pre Brexit levels. If you would like more information in regards to Australian dollar exchange rates or would like more information on the rates that we can offer feel free to email me on drl@currencies.co.uk.

 

 

Retail Sales down under disappoint but AUD remains resilient, where to next for the GBP/AUD pair?

Despite some disappointing data being released in the early hours of this morning, the Aussie Dollar has remained resilient against the Pound even though its dropped off of it’s 1-month high against the US Dollar.

Retail Sales rose just 0.2% through September which was below expectations, and now there are concerns that 3rd quarter economic growth could disappoint. The GDP figure for the 3rd quarter will be released in early December so I expect economic data releases covering the Australian economies health to be followed closely. Despite the softening against the US Dollar as a result of this morning’s early release the AUD/USD rate has still strengthened by over 1.5% throughout this week.

The Aussie Dollar has also gained value vs the Pound this week although not quite to the same extent as AUD/USD. Moving forward the pair are most likely to be driven more by the Pound’s value and how its impacted by the Brexit developments. Sterling has strengthened against a raft of currencies over the past few days after a number of positive updates have been released. On Wednesday the Brexit Secretary, Dominic Raab suggested that the deal could be in place by November the 21st, which saw a spike in GBP exchange rates as hopes of the deal being wrapped up during this month had waned after talks stalled during October.

Then on Thursday morning news broke that there is a deal in principle for the UK to retain access to EU financial markets after the Brexit has taken place, and this also pushed GBP exchange rates higher which is in my opinion why the Aussie Dollars gains against the Pound this week haven’t been as substantial as the they have vs the USD.

If you’re planning on making a currency transfer involving the pairs discussed today, and would like an opinion on the rates or an update if they move dramatically, do feel free to register your interest with me.

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.

Brexit talks hinder Sterling vs the Australian Dollar but are Australian house prices set for a crash?

Sterling has continued to drift lower vs the Australian Dollar as the topic of Brexit continues to rumble on. At the moment there are ongoing discussions about the Irish backstop arrangement and the current proposal is to keep the UK in a single customs area during the Brexit transition period which could be extended for another year.

Prime Minister Theresa May has suggested that the deal between the UK and the European Union is practically 95% done but with the Irish border issue far from being agreed I don’t think we’ll see the Brexit talks concluded in the near future and this could continue to weigh heavily on GBPAUD exchange rates.

If we turn the focus towards what is happening down under the Australian Dollar has been weakening against the US Dollar but remained fairly robust against the Pound highlighting the problems faced for Sterling by the ongoing Brexit uncertainty.

Property prices in both Sydney and Melbourne have started to show signs of falling with Deloitte claiming that some house prices are falling by as much as AUD$1,000 in a week.

Prices have been previously going up very quickly and with demand starting to wane this has caused the market to try and correct itself. Historically low interest rates have encouraged large amounts of borrowing and this has fueled the property market and with foreign investors being discouraged owing to previous reforms this has caused the housing market to come under pressure.

In my opinion the Australian economy will come under further pressure in the months ahead as we have also seen Chinese GDP at its lowest point in 10 years but until we get some positive news surrounding what is happening to the UK with its relationship with the European Union I expect Sterling’s advances to be relatively limited.

If you have a currency transfer to make and would like to save money on exchange rates when transferring Australian Dollars then contact me directly for a free quote. I have worked in the foreign exchange industry since 2003 and I’m confident that not only can I offer you bank beating exchange rates but also help you with various contract types that may suit your need.

For further information feel free to contact me directly.

Tom Holian teh@currencies.co.uk

 

Is now the time to sell Austrlian dollars and buy sterling?

Last week the Australian dollar fell to multi year lows against sterling and the US dollar and the economic indicators suggest that further losses are on the horizon for people selling Australian dollars. For people that are researching potential events that will impact the Australian dollar, you should have come across the reasons for why the Australian dollar has been devaluing. The key driver is the strength of the US dollar.

Carry traders which borrow money in low interest rate jurisdictions and invest in high interest rate jurisdictions are not choosing the Australian dollar like they once were because US interest rates are now higher than in Australia and it looks like the gap is set to widen when the US raise interest rates in December.

The other major problem for Australia is that they are stuck in the middle of the trade war between the US and China. Australia heavily relies on China for trade, however Australia also relies heavily on the US for security. At present the trade war between the two leading countries is having a negative impact on the value of the Australian dollar and I expect this trend will continue.

As the UK are now closer to securing a deal with the EU, it looks like GBPAUD exchange rates are heading in one direction and that’s towards 2. For people that are selling Australian dollars to buy sterling you are still generating an additional £15,000 on a 500,000 transfer compared to pre Brexit levels, therefore taken advantage now may pay be your best option.

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.

 

Expect major volatility for GBPAUD exchange rates

Overnight reports have emerged that  in the upcoming days the UK Prime Minister Theresa May will potentially offer a significant concession to the EU, which would potentially break the deadlock in the Brexit negotiations. The plan is for the UK to remain tied to European Custom laws once the transition period is over at the end of 2020. This wouldn’t be indefinitely, but until the UK manage to negotiate a deal in regards to the Irish Border, however its likely that the new plan would be in place at least to the next general election.

The problem for Theresa May, is that by extending an arm for the Europeans it will mean the UK  will struggle to negotiate trade deals globally and that is one of the arguments to why the UK are leaving the EU in the first place.

Personally I see this going one of two ways. If the Conservative party and the DUP back the PM’s plan, I believe a deal is close to being struck and therefore I expect the pound will rally short term. However if the PM does not get the backing from her party, I believe a vote of no confidence or a general election is closer than people think. If this was the case it could have a devastating impact on the value of the pound and Australian dollar buyers may have a bitter taste in their mouths for a long time to come.

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 remain above 1.80?

For clients buying Australian dollars with pounds, over the last couple of weeks opportunities have presented themselves. Arguably this is because the Australian PM was ousted and trade wars between China and the US is putting pressure on the commodity currencies.

However short term, Australian dollar buyers could be running out of time. After this weekend the Conservative Conference will start and we should find out the more about the Conservative party’s stance in regards to Brexit.

UK Prime Minister Theresa May has reinforced in recent weeks that her Chequers plan is the only option. However MPs such as Boris Johnson have called for the Prime Minister to forget her chequers plan and to adopt a similar approach to the Canadian free trade agreement.

Personally I expect the PM to come under further pressure and there will be further commentary in regards to a vote of no confidence. If this materialises and therefore there is any chance of a general election GPBAUD could be back trading in the 1.60s before long.

Any other news Governor of the Bank of England Mark Carney is set to deliver a speech in Salzburg tomorrow. Interest rates are set to remain on hold for the time being and I expect him to be cautious knowing that the conservative conference is fast approaching. It was only last week he stated 35% of the housing market could be wiped if there is a no deal, therefore this could be another sterling negative release.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your requirements. 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.

Pound collapses against the Australian Dollar after Brexit talks stall (Tom Holian)

The Pound collapsed against a whole host of currencies including vs the Australian Dollar after a bad week politically for the UK.

The Pound began to drop on Thursday when the unofficial EU meeting didn’t go very well with a number of EU leaders rejecting the Chequers plan put out by Prime Minister Theresa May.

She criticised the EU and said if they reject her plan then they will need to come up with a plan of their own. Clearly there is no plan coming at least in the short term and this uncertainty caused problems for the Pound vs the Australian Dollar.

Even further losses came on Friday afternoon as Theresa May gave a statement on Brexit and confirmed that a second referendum will not be coming and that she is focused on making sure democracy will prevail. The markets weakened during the statement with GBAUD exchange rates falling below 1.80 after trading above this resistance level for a while.

The Australian Dollar was also given a boost after the Trump administration confirmed that they will not be putting tariffs on Australian steel and aluminium exports.

The Aussie Dollar has been under pressure recently caused by the Trade Wars between the US and China and as China is Australia’s largest trading partner this will often have a negative effect on the value of the Australian Dollar. However, as Trump has not included them in his latest weight throwing exercise this has helped the Australian Dollar to strengthen against Sterling.

The Australian economy had a further boost recently with credit ratings agency S&P upgrading Australia’s credit outlook from negative to stable for the first time in two years.

With the Australian trade surplus improving as well as record growth in employment this has been another reason for the fightback by the Australian Dollar vs Sterling.

As we go into next week the GBAUD is likely to be heavily influenced by the ongoing Brexit saga so make sure you’re well prepared for some volatility ahead for the Pound vs the Australian Dollar.

Having worked for one of the UK’s leading currency brokers since 2003 I am confident of being able to help you save money when buying or selling Australian Dollars as well as helping you with the timing of your currency transfer.

If you have a currency transfer to make or would like further information as to what is happening to GBPAUD rates then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk