Tag Archives: GBPAUD

Trade Wars and Brexit dictate GBP/AUD (Daniel Johnson)

GBP/AUD – GBP/AUD currently remains range bound between 1.75-1.80. The outlook for both currencies is not necessarily the best. The Australian Dollar will find it hard to find a momentum due to the ongoing trade war between China and the US. Australia has a heavy reliance on China purchasing it’s exports, particularly iron ore. The tariffs imposed by the Trump administration are quite severe and with China threatening to match US tariffs Dollar for Dollar this will hit both economies hard and in turn the Australian Dollar.

During times of global economic uncertainty investors tend to avoid commodity based currencies in favour of safe haven currencies. Despite the US initiating the trade war, the US Dollar is proving to be the destination of choice. 10yr treasury bonds currently offer the best returns seen in years and the Federal Reserve have the intention to hike interest rates a further two times by the end of the year.

I feel the trade war with China could be sustained despite the US holding the majority of the cards.

From the UK side, Brexit negotiations will be key the the value of Sterling. Theresa May’s Brexit proposal has taken criticism as it goes against how Brexit was sold to the public.

The proposal includes a free trade deal for goods and agricultural products. This would essentially keep the UK’s rules and regulations aligned with those of the EU. This would allow trade in goods to flow freely and the Irish border would remain open.

The proposal for services however will be different. The UK would like to take back control of services, particularly the financial sector. Services make up 80% of UK GDP. This would result in more barriers for companies’ trading aboard.

The risk of course is that financial services will move abroad. This is a serious concern as the tax income from the financial sector is huge. May intends to reform the existing equivalence regulation where temporary customs union access is granted, but can be removed at anytime. This situation does not fill me with confidence.

Merkel has apparently agreed to a deal behind closed doors.

If the trade war escalates then we could see GBP/AUD breech 1.80 although I do think this would be a long shot. aim to trade in the 1.79s if you have an Australian Dollar requirement.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

 

GBP/AUD – Sterling stands strong depsite Davis resignation (Daniel Johnson)

GBP/AUD – The progress in Brexit negotiations is key to the value of GBP/AUD. The resignation of chief Brexit negotiator David Davis does not bode well for Sterling.

After Theresa May released her intentions for Brexit David Davis announced he thought the deal was “unworkable” and has subsequently resigned. Angela Merkel has also stated the deal is unworkable.

Despite this the Pound remained robust against the Aussie and we did not see any significant falls. This can be attributed to positive UK data, namely Services Purchase Manager Index (PMI) which came in at 55.1, the highest since October 2017. This is significant as Services makes up around 70% of UK GDP.

There is also of course the ongoing trade war with China and the US which is certainly putting off investors moving to the Australian Dollar. Commodity based currencies are not as popular in times of global economic uncertainty. China is the biggest purchaser of Australian goods and services and Chinese growth will be hindered by the trade war. This in turn will hit the Australian economy.

Despite the US initiating these trade wars the US Dollar continues to gain strength as investors seek a safe haven currency with high returns. The Fed has hiked interest rates on two occasions this year ant there is set to be more. Ten year treasury bonds currently have the highest returns in over four years.

GBP/AUD is currently range bound between 1.75-1.80. AUD buyers aim to move when interbank hits 1.79.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk.

Thank you for reading. Daniel Johnson

 

 

Australian Dollar predicted to rise as global economy picks up

The Australian Dollar has been strengthening in recent weeks, with the GBP to AUD exchange rate being a good example of how much AUD has strengthened after the rate has dropped from around 1.85 to around 1.75 over the last few months.

A number of analysts have begun to adopt a hawkish outlook for the Aussie Dollar moving forward, and the HSBC chief economist for Australia and New Zealand is the most recent key figure to share this view. His name is Paul Bloxham and he’s cited the largest increase in 6 years for the counties GDP as a key indicator as to the health of the economy.

A global pick up will benefit the Aussie Dollar due to its export driven economy, but I also think its important that our readers are aware of the importance of the countries services sector as its now more important to Australia than its mining sector.

Next week on Thursday there will be a number of key releases out of Australia, mostly covering the health of the countries employment sector. If you would like to plan around this event do feel free to register your interest with me.

The economy is likely to remain resilient in the face of trade wars breaking out, due to its close trading relationship with China. One downside though is that the RBA doesn’t plan on hiking interest rates until next year, meaning that the currency may lose some of its competitive edge.

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.

 

Little reason for optimism for AUD buyers (Daniel Johnson)

GBP/AUD –  Sterling has lost significant ground against he Aussie of late. The buoyancy levels of 1.80-1.85 are gone. GBP/AUD currently sits in the 1.75’s.

This is predominantly due to Sterling weakness rather than AUD strength. There is little reason to be optimistic at present for Aussie buyers. The Brexit situation is likely to be drawn out and problematic, with votes on areas of the deal having to be passed back and forth between the House of Commons and the House of Lords for approval. Throw into the mix that many of those involved in negotiations have ulterior motives, seeking to fulfil there own agendas and Sterling could remain weak for the foreseeable future.

Economic data has also been appalling from the UK, particularly GDP which came in at 0.1%, the worst data release on GDP for over five years. The proposed interest rate hike from Bank of England (BOE) in May did not occur and I would be surprised to see one this year.

Australia is heavily reliant on China buying it’s raw materials, in particular iron ore and the US threatening to impose huge tariffs has the potential to slow Chinese growth which in turn will hit the Australian economy. China has agreed to purchase more than USD 200bn in goods and services from the US which has put a hold on the tariffs, the Aussie benefited as a result.

Current trading levels are poor for Aussie buyers, but it could get worse. I can appreciate the reluctance to trade due to the psychological aspect of trading at current levels when it was 1.84 only a short time ago, but believe me there is very little justification to get to those levels again in current market conditions.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

 

What can we expect from the Australian dollar ahead?

The Australian dollar has been stronger as heightened concerns the US may not raise interest rates as quickly as expected triggered a rise in the value of the AUD. Investors have been buying up the US dollar in anticipation of a higher interest rate which would make the currency more attractive to hold, however, with the Australian dollar holding attraction with its higher interest rate, it remains strong.

The next big news for the Australian dollar will be next week with the latest RBA (Reserve Bank of Australia) meeting minutes which will give us the latest news from the RBA’s meeting last week. The expectation is for the RBA to be possibly looking to raise interest rates longer term, some commentators believe this could be as soon as the end of the year but personally, I do not expect anything too soon.

Investors are bracing themselves for the longer-term raise from the RBA which has helped to fuel the recent strength of the Australian dollar, overall impressions are for the currency to avoid some of the more familiar problems where it has dramatically weakened. A key driver of this volatility had been the move from the latest decision so, the next meeting will be crucial to get an idea of where Australian dollar will be headed next.

If you have a transfer buying or selling Australian dollars we can help with the planning and management of any deals with a view to securing the latest information and news when required. For more information please feel free to contatc me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for getting in touch and I look forward to hearing from you and assisting in the future.

 

Factors impacting GBPAUD exchange rates up until the end of the week

Overnight China are set to release a few data releases which clients involved with an Australian dollar exchange short term, should keep a close eye on. Consumer Price Index monthly figures are set to show -0.1%, however 1% up from last month and yearly inflation is set to fall to 1.9% from 2.1%. If the numbers meet the expectation you would expect to see a slight decline for the Australian dollar.

Later tomorrow morning the UK’s interest rate decision will take centre stage, and this decision has received a fair amount of media attention. 2-3 weeks ago forecasters were predicting that there was a 85% chance of a hike and now forecasters are suggesting a 20% chance due to the slowdown in the UK economy. GDP, inflation and retails sales all dropped last month.

My personal opinion is that the pound could come under pressure after the release therefore I would purchase Australian dollars before the event and sell after.

To finish the week Australian Home Loans is set to be released. With it being well documented that there has been a slow down in the major cities, home loads is set to be released at 0.1%. A high reading is seen as positive as it means investor confidence is high and therefore properties are being purchased. 0.1% is 0.3% higher than last months figure, nevertheless it wont be seen as positive therefore I would expect this to be a non event.

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.

BOE May Rate Hike now in Question (Daniel Johnson)

GBP/AUD in detail

Following a host of positive data from the UK last month we have seen a complete reversal. We saw a fall in inflation, (which is now below average wage growth), retail sales were shocking, predicted to be – 0.5% coming in at -1.2% and today a fall in GDP to 0.1% when 0.3% was the expectation.

A rate hike from the Bank of England (BOE) was widely expected in May, however Mark Carney, Governor of the BOE said in a recent BBC interview that a hike may occur later in the year. This along with the poor run of data could well stop the rate hike occurring. Despite this I would not rush out and sell my Sterling to buy Aussie. I still believe we are range bound between 1.80-1.85.

If it drops below 1.80 for more than a few days it may be time to consider moving if you have to move short term. Personally I would hang on for the high 1.83s or 1.84s. If you have real concern consider a Stop/Loss contract for protection.

The Reserve Bank of Australia (RBA) has a quite negative outlook in regards to hiking rates, there is little chance of a hike this year. If you take into consideration the Federal Reserve have already raised rates to 1.75% and intend to hike rates as many as two further times this year you can see why investors are moving from the Aussie to the Greenback. The US-China trade war could also be damaging to the Aussie. If Chinese growth is hindered by tariffs you would expect Australia’s primary export, raw materials to fall in demand and price which would be bad news for the Australian Dollar.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.

If you already have a currency provider in place. Drop me an email with what you are being offered and  I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am  sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

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

Thank you for reading.

Is the RBA’s monetary policy working, and how will this impact AUD exchange rates?

Australian interest rates have been set at 1.5% for around 20-months now. This is the longest period of time the rates have remained the same and interestingly, this is the lowest that interest rates have been in Australia.

Rates were dropped to this level back in August 2016 in order to stimulate the economy after it begun to show signs of a slowdown, and since then the RBA monthly meetings have been non-eventful. This is in stark contrast to back in 2008-2009 when the rates were changed on almost a monthly basis.

There are no changes expected for the next 6-months, which differs to the forecasts in the UK for example where the Bank of England is expected to hike rates at least once this year, with some forecasters predicting up to 4 over the next 18-months or so. The Fed Reserve in the US is pushing forward with the most aggressive monetary policy changes within the developed world, and this has negatively impacted the value of the Aussie Dollar as people are beginning to pool funds in the USD now that they can get a better return than when they hold funds in AUD.

Due to the Aussie economy not picking up much steam despite the low rates, and the RBA’s tentative approach to raising rates due to fears over an overheating house market, I think that we may see the AUD continue to lose value as the year progresses.

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.

GBP/AUD When to move? (Daniel Johnson)

Is there still a rate hike still on the cards form the BOE?

We have seen Sterling fall in value against the Aussie of late following poor retail and inflation data. There was a host of positive data before this including a significant increase in average wage growth and unemployment hitting a 43yr low. We also have a transitional Brexit deal all but agreed with the UK being granted single market access until full exit from the European Union.

It was almost nailed on there would be a rate hike from the Bank of England (BOE) in May. Inflation slowed however, falling below average wage growth and retail sales was predicted to come in at -0.5% in at arrived at a shocking -1.2%. Mark Carney spoke on the BBC following the retail figures and said there is the possibility of monetary policy change, but did not mention May. The markets were fairly stagnant following the data release, but Carney’s words or lack of them caused Sterling to weaken against the majority of major currencies.

Despite this a rate hike is already factored into current levels, if the hike occurs do not expect a huge movement in the pound’s favour, the market moves on rumour as well as fact. The danger is if there is no hike. The pound will lose significant value. It is always worth keeping an eye on Carney’s speech after the rate decision as any hint at a change in monetary policy can cause volatility.

I am of the opinion Sterling is chronically undervalued ant that we are only seeing current levels due to the uncertainty surrounding Brexit. AUD has been considered an investors choice due to it’s high levels of interest, but now with the USD promising higher returns and further rate hikes combined with it’s reputation as a safe haven currency it is almost a no brainer to move to the  US Dollar. I doubt the Reserve Bank of Australia (RBA) will raise rates until 2019 at the earliest.

There is also the ongoing trade war with the US and China. The new tariffs could hit Chinese growth which will in turn hit the Aussie as Australia is heavily reliant on China purchasing it’s raw materials, particularly iron ore.

I personally think short to medium term  GBP/AUD will be stuck between buoyancy levels of 1.80-85.

If you are an AUD buyer and have to move short term, aim to move in the 1.84s.

AUD sellers, I would not hang on for significant gains as I feel the Aussie is fragile. Aim for 1.82 on Interbank.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take  a couple of minutes and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company  trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.

If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

Will GBPAUD rates remain above 1.80?

The pound to Australian dollar exchange rate has been above 1.80 comfortably now for a period and the outlook is now much more positive for the future. The Australian dollar has been losing its shine as investors look for more profitable avenues overseas which include the US dollar. A key driver of late on GBPAUD has been the interest rate changes in the US and the UK, with them hiking, as in the US, or on the way to hiking – the UK.

This difference in outlook compared to the RBA (Reserve Bank of Australia) who are currently refraining from hiking has allowed big movements on the pound and US dollar against the Aussie. The RBA has been monitored very closely over its performance and attitudes to raising interest rates and this will likely continue to be a feature in the coming months.

Generally speaking, I would imagine the RBA will continue to be soft in its assessments moving forwards and this will keep the Australian dollar on the weaker side. Despite this, the Aussie may well find some favour if there are any unexpected twists and turns or bumps in the road on the US and UK path to raising interest rates.

Another factor which will likely weigh on the GBPAUD rate will be the progress on Brexit which could see the pound to Australian dollar rate fall below 1.80 if there are further troubles over the Irish border or concerns over what type of trade deal the UK will get. Any surprisingly strong data from down under might see the Australian dollar fight back against sterling too.

In April I expect a range between 1.78-1.85 as the conditions that have seen us hit the current rates of exchange continue to act as a driver on the pair. Thank you for reading and if you have any upcoming transactions and wish for some insight and information on achieving the best rates of exchange, please do get in touch with me Jonathan Watson by emailing jmw@currencies.co.uk directly.