Tag Archives: RBA

Pound remains strong against the Australian Dollar even after poor UK GDP figures

The Australian Dollar has continued to struggle against the Pound hitting 1.82 during today’s trading session creating some good opportunities for anyone looking to convert Pounds to Euros at the moment.

The Reserve Bank of Australia was relatively dovish during its recent press conference and accompanying statement and it appears as though the next rate change for the central bank down under could be a rate cut in the future.

One of the reasons why the RBA has yet to make a change to interest rates is owing to the recent higher than expected inflation data, which although lower than the 2-3% target has been rising recently.

Typically if inflation rises then the usual strategy to combat this would be to increase interest rates but as the property market in Australia is showing real signs of slowing down then an interest rate rise down under could cause big problems for the Australian housing market and could send home owners in to negative equity.

According to many sources an interest rate cut before the end of 2019 now seems like a certainty and this is part of the reason why the Pound continues to remain relatively strong against the Australian Dollar.

Whilst the Trade Wars between the US and China continue to rumble on then global investment appears to be bypassing the Australian Dollar in favour of the US Dollar and this is another reason for the continued weakness of the AUD vs the Pound.

Earlier on today UK GDP showed a slowdown for the final quarter of 2018 combined with some lower than expected Industrial and Manufacturing Production data but this did little to negatively impact Sterling as the market appears to be waiting to see how the Brexit talks will progress during the course of this week.

I have worked for one of the UK’s leading currency brokers since 2003 and I’m confident that not only can I help you save money on exchange rates compared to using your own bank but also help you with the timing of your currency transfer. For a free quote then contact me directly via email with a brief description of your currency requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Australian Dollar weakens after RBA comments and how will the Irish backstop issue impact the Pound and the Australian Dollar

The Pound has been improving once again against the Australian Dollar and has moved by almost 4 cents during the course of this week.

The Australian Dollar weakened against the Pound after RBA Governor Philip Lowe’s comments that there was a chance that the Reserve Bank of Australia may be preparing for an interest rate cut later on during 2019.

Tomorrow morning the RBA will announce their latest Monetary Policy Statement, which will cover the issues and the reasons why the members voted as they did at the recent meeting.

The reason why this Statement could be key to the short term future of the GBPAUD exchange rate is because it will give us an insight as to what the appetite is of a future interest rate cut.

With the US Federal Reserve having increased interest rates by 9 times since the end of 2015 although they do not appear to be increasing interest rates at the same pace during this year, the risk for the Australian Dollar is that it does not offer the same yield of interest that is available in the impressive US economy at the moment.

If the RBA do decide to cut interest rates later this year then the likelihood is that this will cause the Australian Dollar to weaken in the future but there are many variable in between including the latest Brexit issues.

UK Prime Minister Theresa May is currently in discussions with European leaders to try and sort out the issue of the Irish backstop as the UK and the EU are currently at loggerheads as to how this scene will play out.

The Bank of England are also due to meet today to decide their latest monetary policy decision. Clearly at the moment there is little chance of any change to interest rates whilst we are just 7 weeks from when the UK is due to leave the European Union so it will be the accompanying press conference that will provide any clues as to what will happen to the Pound vs the Australian Dollar. Bank of England Governor has been rather cautious in his tone towards Brexit so any more of the same could see a small wobble for Sterling later on today.

If you would like a free quote when buying or selling Australian Dollars then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Housing market a concern for Australia

Over the last year Australian banks have found themselves tightening lending standards to the recommendations given by the Royal Commission in Australia and reports are suggesting further recommendations are on the horizon. Research found that banks were not checking peoples incomes and spending patterns correctly which meant the public were borrowing money they could not repay.

Early next year the Royal Commission are set to release their final report in regards to lending and if the commission decides further tightening is needed this is going to have a major impact on the Australian housing market and consequently the economy and dollar. If the banks stop lending UBS believe that the market will crash 30%. It’s key to note that house prices have dropped 13% in Perth and the figures are similar in other major cities.

For clients that are holding Australian dollars and are looking to purchase a foreign currency in the months to come, I’m expecting the dollar to have a tough start to 2019. It’s clear in my opinion that the Reserve Bank of Australia have their hands tied in regards to raising interest rates. House prices are falling and no ‘new’ money is coming into the market. If the RBA hiked interest rates it would put further pressure on Australian’s pockets and you would see people trying to sell their houses for cheaper and the housing market would fall further.

However it’s always important to analyse the other currency you will be converting. For example the pound is back under pressure due to Brexit, and opportunity has presented itself. If Theresa May manages to get the Brexit deal through Parliament you would expect the pound to strengthen in the upcoming months and the Australian dollar will lose value against the pound.

However on the other hand the US economy has been producing magnificent economic numbers over the last 12 months, however reports are suggesting a slow down in raising interest rates is on the horizon and now that Trump has lost the House, next years congress is going to be extremely interesting. Will they ask to see Trump’s tax returns and could this put major pressure on the dollar?

For more information in regards to a specific currency pair feel free to email with more information and I will get back in touch as soon as possible drl@currencies.co.uk.

 

 

Australian Dollar loses ground against most major currencies as trade war tension rises

Australian Dollar exchange rates have dropped away against all major currencies in treading today as tensions between the U.S and China rose once again over the weekend.

The Australian Dollar, Canadian Dollar and New Zealand Dollar topped the weakest major currencies of the day and much of this can be pinned down to the uncertainty surrounding the trade negotiations between Donald Trump and Xi Jinping.

As many regular readers will be aware any heightened tensions between the U.S and China can lead to weakness for the Australian Dollar, as the Australian economy can be susceptible to bad news from China.

 RBA meeting minutes tomorrow morning

We have seen a slight improvement in certain areas of the Australian economy recently, however most analysts do not believe that there has been enough to warrant a change in stance from the Reserve Bank of Australia regarding any interest rate changes. Interest rates have remained stable in Australia for a long time now and this is also another reason why the Australian Dollar has lost ground against a number of major currencies over the course of the year.

An higher interest rate will make a currency more attractive to investors as it means they are offered a greater level of return for their money, and with other central banks such as the Federal Reserve in the U.S raising rates on numerous occasions over the past year or so the Australian Dollar has been somewhat left behind.

Should the RBA take a more positive tone in their meeting minutes tomorrow then we may see a little strength back for the Australian Dollar, should their stance remain the same then focus will be back on any political news, such as the trade wars and for those that have an interest in the Australian Dollar against the pound then Brexit and Theresa May will be key.

Should you have the need to buy or sell a large volume of Australian Dollars in the near future and you would like my assistance then you are welcome to contact me (Daniel Wright) directly. You can email me on djw@currencies.co.uk with a brief description of what you are looking to do and I will be happy to contact you personally.

 

Australian Dollar strength vs the Pound but is it just short term?

Despite some very positive gains for the Pound against a number of major currencies Sterling failed to make any real advances vs the Australian Dollar.

Weaker than expected Australian Retail Sales would have typically weakened the Australian Dollar vs the Pound but this was not the case.

The Australian Dollar could even continue its recent rally against the Pound as it appears as though US President Donald Trump is gearing up for talks with the Chinese President about stopping the current Trade Wars which has been taken as good news for commodity based currencies including the Australian Dollar.

As we head in to next week the Reserve Bank of Australia will be meeting to announce their latest interest rate decision and I fully expect interest rates to be kept on hold but it will be the comments made as to whether we’ll see any suggestion of a rate hike coming in the future.

The RBA are in a tricky position as house prices in both Melbourne and Sydney have been falling recently so any interest rate hike could cause more problems for the economy so I think the tone may be rather cautious and this could see the Australian Dollar shows signs of weakness against the Pound following the announcement made on Tuesday.

Clearly the Brexit remains the over-riding factor in determining what may happen for the Pound against the Australian Dollar and with claims made by Brexit Secretary Dominic Raab that a deal could be reached by 21st November if there is any truth behind this story could we see the Pound make gains vs the Australian Dollar later on this month?

If you have a currency requirement involving Australian Dollars and would like to save money on exchange rates compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Could the Pound improve against the Australian Dollar after RBA minutes and EU Summit this week?

The Reserve Bank of Australia published their latest set of minutes which confirmed interest rates would be kept on hold for the time being which has led the Pound to hit 1.85 against the Australian Dollar overnight leading to some excellent opportunities to buy Australian Dollars with Pounds this week.

With property prices starting to fall in both Sydney and Melbourne the RBA’s tone was rather cautious. Indeed, property fell by 6% in Sydney and 4% in Melbourne, which have previously been the best two performing markets in recent years.

The central bank went on to warn the markets that the trade policies between the US and China could continue to cause potential negativity for the Australian economy but that as Australian growth is at 3% the economy is still relatively robust.

However, as house prices are falling and wages are not going up that quickly this is why interest rates in Australia are not likely to be going up anytime soon and predictions are that the next interest rate hike may not come until 2020.

Meanwhile, the Pound is being affected by what is happening with the latest Brexit discussions and with the EU summit due to start tomorrow and conclude on Thursday the main topic will be that of the Irish border issue which appears to be far from getting sorted.

Previously, the discussions were due to end by this particular meeting but with an emergency Brexit summit planned for next month we may not see the talks concluding positively this week so be prepared for a lot of volatility coming in the next few days if you’re planning a currency transfer involving the Pound vs the Australian Dollar.

If you have a currency transfer to make and would like to save money when converting Australian Dollars then contact me directly for a free quote and a brief description of your requirement and I look forward to hearing from you.

Tom holian teh@currencies.co.uk 

RBA interest rate decision key for AUD movements this week

Tomorrow we have the release of the RBA (Reserve Bank of Australia) interest rate decision and possibly more importantly the RBA rate statement.

There are no expectations of any interest rate changes this time around but what will be key is the tone of the RBA in their monetary policy statement. The Australian economy has shown small signs of growth and with that we would expect a slightly more positive tone from the RBA, but I would personally be surprised to see a nod towards any imminent change to interest rates as there is still an issue with rising house prices and high household debt. Not to mention the on-going trade wars between China and the U.S that have been regularly covered on this site.

Interest rates can be key to the value of a currency and even the mere speculation of a rate hike can lead to that currency gaining strength, so should the RBA suggest that a hike is getting closer then you could expect to see the Australian Dollar gain a little value in Tuesday’s trading.

The rate decision dominates market news out for Australia this week but there are a number of other releases around the globe that may still impact Australian Dollar exchange rates. For those tracking GBP/AUD we currently have the Conservative party conference on until Wednesday in the U.K along with Brexit which could throw up anything at any time. Anyone following EUR/AUD will be keeping a keen eye on the Italian debt and budget issues that are creeping into the media and for those with an interest is USD/AUD the Non -farm payroll data due out in the states at the end of the trading week on Friday will be one to watch.

Non-Farm payroll data measures the number of people in Non-agricultural employment in the states and can have an impact on all major currencies as it will effect global attitude to risk.

If you have a pending Australian Dollar exchange to make and you would like assistance with it, both in terms of getting the most for your money and moving it over securely then feel free to contact me (Daniel Wright) directly. You can email me on djw@currencies.co.uk and I will be more than happy to get in touch.

Will the Australian Dollar continue to weaken, and what’s causing the weakness?

The Aussie Dollar is under pressure at the moment, with the currency hitting a 20-month low against the US Dollar earlier this week which has hit the headlines. This most recent drop off was spurred by a number of major Australian banks such as Westpac, Suncorp and Adelaide Bank have all increased their mortgage lending rates.

The ongoing saga surrounding the US and Canada’s North American Free Trade Agreement has also weighed on the Aussie Dollars value as sentiment surrounding the emerging markets has waned, after the talks between the US and Canada didn’t result in an agreement. The South African rand has also lost a lot of value recently for similar reasons.

No interest rate hikes are expected from the Reserve Bank of Australia until at least this time next year, and with US interest rates now higher than Australia’s the currency has lost a competitive edge which is another reason for the AUD weakening.

Moving forward I’m expecting to see the issues between the US and Canada as well as the issues with China to continue to weigh on the Aussie Dollar’s value. This is because of the Australian economies dependence on a strong global economy especially as the country becomes more service based.

This week there are a few further data releases that will provide us with an overview of the Australian economy, as trade Balance figures are released tomorrow and Home Loan Figures will be released on Friday.

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.

Market awaits RBA interest rate statement on Tuesday

The Australian Dollar has had a better start to the week, making gains against all major currencies as investors and speculators started to favour the Aussie over the safer haven currencies.

This trend may get a further boost or we may see it turn around tomorrow morning when we have the release of the RBA (Reserve bank of Australia) interest rate decision and monetary policy statement.

No change to interest rates are expected, however it will be the tone of the approach from the RBA that will be the likely market mover. In previous meetings the RBA have expressed concerns over rising household debt, issues with the Chinese economy, house prices and various other factors that are halting the rise of interest rates in Australia. A continuation of this tone from the RBA may well lead to Australian Dollar weakness and a more positive overview will likely give the Australian Dollar strength.

Where the Australian Dollar may find difficulty is if interest rates start to fall further behind  other larger economies such as the U.S. At present interest rates in the U.S have now climbed higher than those in Australia Following a sustained period of interest rate hikes, this has led to a flow of money out of the Australian Dollar and back in the U.S due to it offering a higher level of return and being deemed and a much more stable currency.

There are a number of factors that could dent the AUD in the coming weeks and months including further economic issues with China, further political issues within Australia, global attitude to risk decreasing due to trade wars or rising tensions between other countries and the general health of the Australian economy.

Any one of these issues could rise further to knock back the Australian Dollar in the near future so I still personally feel that  AUD selling levels are good for the current market conditions, and I would not be surprised to see the Australian Dollar take a knock back in the coming weeks ahead, however there are many surprises that pop up that may change that view.

If you have the need to exchange Australian Dollars into any major currency, or to buy Australian Dollars with another currency then you are more than welcome to contact me and I will be happy to help you personally. You can email me (Daniel Wright) on djw@currencies.co.uk and I will be happy to get in touch with you to discuss the various options available to you to maximise your exchange.

 

Australian Dollar weakens following RBA meeting minutes

Tuesday saw a fairly poor performance by the Australian Dollar against most major currencies, following the release of the RBA (Reserve Bank of Australia) meeting minutes from their last interest rate decision.

The minutes will basically show what was discussed at the meeting and how the RBA came to various decisions and i’m afraid the tone was fairly negative when reading through discussions and future fiscal plans.

The main areas of concern are the on-going trade wars between Donald Trump and China, as many regular readers of this site will be aware Chinese economic performance is fairly crucial to the performance of the Australian economy and the Australian Dollar. Not only do China import a huge amount of goods from Australia but they Chinese tourists make up a fairly large percentage of tourism in Australia.

The large sum of household debt at present in Australia is also of great concern to the RBA. Household debt is currently at worrying levels and what this means is that until this starts to drop back off it will be very difficult for the RBA to raise interest rates, and they did put a nod to this in the minutes.

Should they raise rates then we may see a large quantity of households go into default in Australia which would only escalate the economic problems even further, it does now appear that unless things improve then will not be seeing an interest rate hike for the foreseeable future which will more than likely hold the Australian Dollar back against other major currencies.

An interest rate hike is generally seen as positive for a currency and with other areas around the globe slowly raising their interest rates the Australian Dollar is in danger of being left behind.

If you have a currency exchange to carry out in the coming days, weeks or months ahead and you would like assistance with developing your strategy then you are more than welcome to get in touch. I have been helping clients move money internationally for over a decade and will be more than happy to have a chat with you about your specific needs.

Feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will get in touch with you personally.