Tag Archives: RBA

GBP vs AUD Strengthens as Markets Unsure If BoE Will Cut Rates

Sterling has strengthened versus the Australian dollar, in part because markets are increasingly unsure if the Bank of England (BoE) will cut UK interest rates, when the central bank next convenes on January 30th.

Since late last week, investors have been raising the odds that the BoE may cut borrowing costs from 0.75% back to their all-time low of 0.5%. Although now, markets are also considering the possibility that the central bank might stay its hand.

Pound Strengthens on Signs of “Green Shoots”, Ahead of Next Week’s PMIs

There are signs of economic “green shoots” in the UK, following the Conservative Party’s decisive election win last month.

It’s thought that, for UK businesses, this has provided a degree of certainty both about the UK’s economic outlook, and regarding Brexit. As such, CEOs are beginning to raise their investment intentions.

For example, an Institute of Directors survey this week has found that, at the end of December, firms were their most confident about the outlook for the next year than any time since the survey started in January 2018.

In particular, the financial markets are waiting to see if there’s a post-election bounce, at next Friday 24th’s IHS Markit “flash” PMIs (Purchasing Managers’ Indices) for January 2020.

These will be the first clear indicator of whether activity has picked up in the UK’s key services and manufacturing industries, following the election.

Hence, depending on whether the data are upbeat or not, the BoE may be more or less likely to cut interest rates toward the end of this month. In turn, this could affect the pound.

Australian Dollar Could Be Affected, as RBA May Cut in Early February

Meanwhile, looking Down Under, investors continue to weigh the possibility that the Reserve Bank of Australia (RBA) will cut interest rates, when it next meets on February 4th.

If so, this would be to support the economy, during the ongoing bush fires. Were the RBA to cut borrowing costs from 0.75% down to 0.5%, their all-time low, this would traditionally weaken the Australian dollar.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me, James at jll@currencies.co.uk

Australian Dollar Receives Support From US-China Deal Signing Whilst Awaiting Manufacturing Data

AUD received further support this week from the US-China deal which is set to be signed soon by both parties. The deal looks like a completed one and when pen meets paper, the global economy looks poised to rise, of which AUD will surely benefit. However, some analysts are suggesting that the AUD is lacking drive as investors adjust to 2020 growth and trade outlooks. The RBA’s rate cut decisions for 2020 are still weighing heavy on the Aussie Dollar. Investors will be hoping for positive news from this Thursday’s upcoming manufacturing data PMIs.

AUD Hoping for the Signing Ceremony as Soon as Possible for the US-China Deal

For months the trade deal between the US and China has dominated headlines in the trading world, and rightly so as the global economy is likely to rise bringing with it many in the market like AUD who has close trade ties with China. Both US President Trump and Chinese officials have confirmed that a ‘Phase One’ deal has been agreed on and that the deal will be signed in due course. Investors are hoping that this signing process will happen sooner than later to start the New Year off in good stead.

Upcoming Manufacturing PMIs Will Determine AUD’s Next Directional Shift

There is little data to be released before the New Year arrives, which means that today is likely to be a slower day for the Aussie Dollar. But this Thursday will see the release of the Australian manufacturing PMIs for the month of December. Investors will be hoping that the figure will build upon the previous months number and boost AUD with a positive turnout. Should the figures beat projections, then AUD will likely rise and edge against its major rivals like GBP.

RBA Interest Rate Decision Weighs Heavy on AUD Going Forward

The RBA’s recent dovish stance has weighed heavy on AUD in recent weeks. With their final meeting of 2019 opening the door to further cuts in 2020, AUD fell accordingly. Investors will be hoping that Thursday’s manufacturing data will be positive enough to alleviate some tensions from the RBA’s potential cuts which have investors worried.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

Three Year High for GBP/AUD Exchange Rate as Confidence in Conservative Majority Rises

The GBP/AUD exchange rate rallied on Monday following a high investor confidence in the Tories securing a majority in Thursday’s General Election.

Confidence in Tory Majority Rises over the Weekend Giving a Boost to the GBP

Over the weekend, opinion polls showed further support for the Conservatives who now are edging the Labour party by around 10 percentage points. Also, yesterday was the release of Survation’s poll which showed the gap between the two front-running parties was 14 points. This may sound positive to the market and investors who are hoping for a Tory majority and a carry-through of Brexit going into 2020, but experts have cause for concern. They have noted that a wide spread has been observed concerning the Tory lead over Labour which has spanned from 6 points to 15 points. They warn that this seems encouraging, but should the figures show around the 6-7pts territory that a hung parliament will occur – which would be disastrous for the markets Brexit plans.

Trade Tariffs Could Weigh on the Australian Dollar

The AUD is still being held at the mercy of the US-China trade talks. Economists are predicting tensions to rise ahead of the US’s new tariffs on Chinese goods. Towards the latter end of the week, the US is expected to hit Chinese goods with added tariffs. US President Donald Trump mentioned this recently but noted that something could happen on the 15th December but for now the US is enjoying promising discussions with China about the trade talks. Reports out of China suggest that Beijing was keen to secure a deal with the US as soon as possible. Despite both parties still appearing to be optimistic towards a deal being reached, AUD has slumped following weak Chinese export data in November as exports to the US were down by 23%, which sees the twelfth consecutive monthly decline for these figures.

AUD is still waiting on RBA’s governor Philip Lowe to deliver his speech on the Aussie economy and to address last weeks weak economic data. Should his tone be dovish, AUD is likely to slump against GBP. For GBP, the GDP data for the UK is set to be released later today, should these figures be below expectation that could weigh on GBP.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you. teh@currencies.co.uk

GBP/AUD Slides Ahead of This Week’s General Election Whilst Aussie Is on the Rise

This week will be an important one, not only for the GBP but all of the major currencies as the UK’s General Election takes place. The outcome is likely to have a huge knock-on effect for all currencies that trade with the GBP. Meanwhile, the AUD is riding a positive wave of late, positive economic data from China has seen the Aussie Dollar receive an upswing of support.

GBP/AUD Declines Ahead of This Week’s UK Election but Looks to Rally on Tory Majority Chances

The GBP appears to be in decline ahead of the general election this Thursday. The contributing factors last week were political and economic uncertainty which weighed on the manufacturing sector’s ongoing downturn. There were moments of optimism which drove the Pound back up as a Tory majority looked more likely with the release of opinion polls, a Tory majority would ensure that Brexit gets seen through and this buoyed the Pound throughout the week.

This Tuesday, the UK manufacturing and industrial production figures are due to be released. If they continue the downward pattern that has been observed of late then the GBP’s gains are likely to be limited. Added to this, October’s GDP data is expected, should this fall too then the Pound’s outlook will be flat. Attention will be turned to Thursday’s election and if Boris Johnson’s Conservatives win a majority then the GBP/AUD exchange rate is likely to rise.

Australian Dollar Made Good Progress Last Week but Could Begin to Decline with a Dovish RBA

The AUD made clear gains last week as the Chinese manufacturing data saw the largest expansion since December 2016. This gave the AUD a boost as it’s close links with the Chinese economy meant that this was mutually positive for both countries. However, the AUD is predicted to slump against the Pound following the upcoming speech from RBA governor Philip Lowe. Economists are noting that should his speech be given with an overly dovish tone about the AUD outlook and the weak GDP growth, then the currency is likely to fall. Westpac’s consumer confidence data is also set to be released on Tuesday, should the confidence slide further, the AUD will likely decline with it.

For the upcoming week the main topic will be the outcome of the UK elections, this is likely to be on every nations radar as the outcome will cause ripples in the trading world whatever the outcome. The Aussie Dollar will be hoping for positive data over the week and a pick up in the US-China talks.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

The Pound Sterling Edges on the Australian Dollar as the Exchange Rate Hits 3-Year Highs

The GBP reported gains on the Aussie Dollar yesterday. The GBP/AUD exchange rate hit a new three-year high, this is the highest since the EU referendum. With a soft AUD, the rallying looks to continue into 2020 for the GBP.

Upward Trend for the GBP Against the AUD

The GBP/AUD exchange rate hit a new three-year high just yesterday which was reported to be trading at 1.9214. The Sterling was rallying which the AUD fell soft. Experts have suggested that the Australian Dollar has been predicted to struggle throughout 2020 also. The GBP has been following a rising trend since late-July as expectations for Brexit have been building. The market hopes that Boris Johnson and the Conservative party can win a majority government in the General Election on the 12th of December which is less than a week away. Should the Tories retain power, the market expects them to be able to swiftly deliver Brexit in early 2020.

AUD Paves the Way for Other Currencies to Rally upon Its ‘Softness’

For the AUD, its recent poor performances have left it in a sorry state which many other currencies are taking advantage of and using it to rally in the exchange rate crosses. Australia reported a weaker than expected Q3 growth for 2019 which has led to the softening of the currency. Economists have suggested that the “sluggish” Q3 GDP data will undoubtedly lead to interest rate cuts in 2020. They also highlighted other issues for the Aussie economy such as consumption, household demand and ongoing slumps in the housing market.

Weak AUD Suggests Interest Rate Cuts Are Likely to Follow in 2020

Evidence for the Reserve Bank of Australia to cut interest rates is building up. The aforementioned poor Q3 GDP data has weighed heavy on the AUD and has also exacerbated the housing troubles through putting pressure on construction and investments. The RBA did opt to keep the interest rate at 0.75% this week and Governor Lowe announced a more optimistic tone for the AUD’s outlook which gave the AUD a boost in the markets, pushing rate cut expectations back.

But this optimism might not be enough for the AUD, a combination of a poor run in data, a slowing Chinese economy and commodity prices are extra burdens which may drag on the heels of the Australian Dollar. Therefore, many are predicting that rate cuts will be inevitable going into the new year to try and give the Aussie economy a lift.

Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer drl@currencies.co.uk.

Promising Chinese Data Aids Aussie Dollar

The Australian Dollar has started the month on the front foot, this is mainly due to some better than expected data coming from China yesterday. With AUD holding a strong tie to the Chinese economy, the boost was mutual for both parties. To start the week the GBP/AUD exchange rate is down from the end of last week, with resistance being shown on the charts.

Chinese PMIS Exceed Expectation, Bring up AUD with It

Yesterday, the release of China’s November PMIs were released, all three beat expectations. The Caixin manufacturing index came in at around 51.8, which beat the market prediction of 51.5. This figure also pushes up to a three-year high, this might be a hint that the Chinese economy is on the mend. For Australia, China is its prime trading partner, the pick-up in the Chinese economy is a huge boost for AUD and its outlook. The positive news took AUD above GBP, EUR and USD on Monday.

GBP/AUD Exchange Rate Drops Following Resistance on the Charts

The GBP/AUD exchange rate is currently trading at 1.9068, which is down 0.30% from where it finished up on Friday last week. This drop has coincided with the rate reaching a peak against a notable level of resistance on the charts. GBP/AUD previously struggled to overcome the level of around 1.9091. However, on Friday, the exchange rate pushed through this resistance as it rallied to highs that haven’t been matched since the 2016 EU referendum.

AUD Outlook Appears to Be Dominated by the Upcoming RBA Decisions and Third Quarter GDP Data

For AUD, the outlook seems to be revolving around the RBA and the release of GDP data over the course of the rest of the week.

For the RBA, markets are considering whether the RBA will cut interests rates again in 2020. There are also concerns that they may begin to print money to buy government bonds which would introduce a quantitative easing programme – something that the RBA suggested wasn’t on the horizon. Both QE and rate cuts would give a boost to the Aussie economy, but a trade-off would be that AUD would be weaker in 2020. The RBA is set to take place later today (Tuesday).

For Wednesday, attention will turn to the Australian Bureau of Statistics who are set to release the Q3 GDP for 2019. Any positive figures will likely give the Aussie economy a further boost off the back of the strong Chinese data that emerged.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me James at jll@currencies.co.uk

Underperformance Is the Key Word This Week for the Australian Dollar, with QE Predicted in 2020

The Aussie Dollar has been suffering lately, with no luck going into the latter end of this week either. Despite the RBA’s governor Philip Lowe suggesting that QE was not a tool to be used right now, he failed to remove it out of the question altogether and this has instilled fear of QE being utilised in early 2020.

QE Looking Likely for the RBA in the Early Stages of 2020

Economists have tipped QE for the RBA in early 2020. The current target for inflation has not been met and this has thrust the QE or negative rates into the question for the RBA. The markets are beginning to fret whilst the labour market deteriorates despite interest rate cuts from the bank. To rub salt into the wounds of the AUD, the global economy is still dragging its way through a slowdown. However, Lowe stated on Tuesday that extreme policy actions like these will be unlikely for Australia as the AUD growth should pick up next year.

What Would QE Mean for the Aussie Economy?

QE refers to the creation of new money from the RBA in order to buy government bonds and force their yields lower. These yields are integrated into all the interest rates that are charged across economies so when they are forced lower from central banks an indirect reaction of a reduction in borrowing costs for companies and households is also induced. The general idea with this is that low borrowing costs leads to more spending which ultimately can help lift inflation towards a predetermined target. However, in doing so QE means a lower return for investors and a more unattractive currency.

Us-China Trade Talk Looks to Break down Once More, AUD Looks to Suffer

For weeks the AUD has been banking on a successful trade deal between the US and China. Things appeared to be going well recently, but news broke yesterday that President Trump has signed the Hong Kong Human Rights and Democracy Act into law this week which has sparked immediate reaction from China. Investors are now worried that a breakdown could come to light as China sent threats of retaliation to the decision. The AUD is heavily reliant on the Chinese economy and therefore, should the deal not go through, it will likely face losses.

Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer drl@currencies.co.uk.

An Edging GBP/AUD Exchange Rate Following Rising Tory Majority Hopes

A new week spells a new opportunity for both the Australian Dollar and the Pound Sterling to attain a boost to their current standings. But with AUD’s recent poor performance and reliance on the US-China trade war deal being completed, a boost is looking unlikely. For GBP, the heavy reliance on its general election outcome next month. A Tory majority appears to be a reassurance that Brexit will be delivered, that is what investors are banking on.

GBP/AUD Rate Edged Higher Yesterday

The GBP/AUD exchange rate edged higher yesterday by 0.4%. The pairing was trending at around AU$1.897, the Conservatives continued to maintain their lead in the polls following the much anticipated release of their manifesto on Sunday.

The deputy director-general of the Confederation of British Industry (CBI) mentioned that a pro-enterprise vision will gain businesses attention, whilst looking to build upon more ambition on areas like access to skills, infrastructure and reaching net zero. The Conservative party are currently in favour with the markets due to their pro-business approach with their policies. GBP/AUD edged yesterday as the response to the new manifesto did not upset the Tory lead over the Labour Party in the opinion polls.

AUD/GBP Rate Sinks, Us-China Trade Deal Becomes Urgent for Australian Economy but Shows Signs of Promise

For AUD, trading has not been positive over the past few weeks. Being in a constant stranglehold for the outcome of the US-China trade war deal, their progress has been limited in the markets. However, the deal once again looks more hopeful, President Trump mentioned that a deal between the two largest economies of the world was ‘potentially very close’. This gave much needed optimism to the trade talks. The RBA’s Assistant Governor gave a speech yesterday and the minutes are eagerly awaited to observe whether a dovish approach has been taken to the economy of Australia. Should this be the case, it is likely that the Aussie Dollar will take a hit.

AUD Could Rise Following Hawkish RBA Commentary

Philip Lowe, governor of the RBA is set to give a speech later today, investors will be hoping that he produces a hawkish tone which will likely buoy AUD on hopes of a recovering economy. Alongside this, any progress being made in the US-China talks will undoubtedly boost AUD/GBP standing. GBP will be looking towards the October BBA mortgage approvals which are set to be released later today, should positive figures be announce GBP will likely favour over AUD in the day’s trading efforts.

Feel free to email me, Dayle Littlejohn if you would like to know more on the factors affecting the AUD/GBP pairing or have an upcoming currency transfer drl@currencies.co.uk.

Pound to Australian Dollar Outlook after Supreme Court Rules against British Government

Parliament set to return today

The pound to Australian dollar exchange rate remains supported with rates having touched 1.84 for the GBP vs AUD earlier today. Yesterday saw the Supreme Court in Britain rule against the government finding that it was unlawful to prorogue parliament for 5 weeks. Today will now see parliament return at 11:30 and more uncertainty will inevitably come out of this. There have been calls from opposition party leaders for the Prime Minister to resign.

It has been reported that the government may use the opportunity of asking an ‘urgent question’ to try and force a debate on having a general election. The opposition parties that wish to see Boris Johnson depart from office are unwilling to call a vote of confidence which would trigger a general election which leaves a continuing deadlock in parliament. Jeremy Corbyn the leader of the Labour party is not expected to call for a vote of confidence in the Prime Minister today. Expect high volatility for GBP to AUD exchange rates as the Brexit deadline of 31st October approaches. Those with pending requirements to either buy or sell Australian dollars would be wise to plan around all the latest developments coming out of Westminster.

Will the RBNZ cut interest rates in November?

The Reserve Bank of Australia have said that the Australian economy is at a “gentle turning point”. The RBA cut interest rates twice this year with two consecutive rate cuts in June and July putting the pressure on Australian dollar exchange rates. The speech from Governor Philip Lowe was perceived as more dovish than expected. Keeping all option open he said that the RBA would “take stock of the evidence” on whether to cut again or not but the tone was seen as softer than the previous rhetoric. The Reserve Bank of New Zealand is also expected to hold rates having shocked the markets wit ha 50 basis point rate cut this year. It is relevant for the Australian dollar as the RBA was quick to act after the RBNZ made its policy decision to cut rates. The RBNZ are tipped to cut rates again in November and there is an argument to say it may have some sway on the RBA’s decision making.

For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me James at jll@currencies.co.uk

Australian economy under pressure and Boris attempts to suspend parliament

The Pound to Australian Dollar exchange rate has been moving in a positive direction recently.

The Australian economy has been struggling as of late owing to a fall in house prices, rising unemployment levels and a cut in interest rates to their lowest level on record at 1%.

The ongoing US China trade war is causing problems for the Australian economy and this is causing an issue for the Australian Dollar.

The Australian economy is heavily reliant on what happens in China as as China is such a large importer of natural resources from down under this can negatively affect the value of the Australian Dollar.

China is growing at its slowest level in over thirty years and the Chinese Yuan is now at a 11 year low.

The ongoing issues surrounding the Chinese economy and its drop in demand for Australian goods has allowed the Pound to push above 1.80 vs the Australian Dollar recently.

There are also rumours that the Reserve Bank of Australia are under pressure to cut interest rates even further from their current levels.

Westpac is calling for an interest rate cut to 0.5% whilst Deutsche Bank has predicted that we may even see rates as low as 0.25% by the end of the year.

However, RBA governor Philip Lowe has suggested that they may even consider Quantitative Easing as a form of monetary easing.

Indeed, he spoke out recently claiming ‘we are prepared to do unconventional things if the economy warranted it.’

In the meantime things are up in the air politically with British Prime Minister Boris Johnson having moved to suspend parliament.

His aim is to remove the chances of MPs trying to legislate against a no deal Brexit. This has caused a lot of movement for GBPAUD exchange and I fully expect this to cause even further moves this week.

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

Tom Holian teh@currencies.co.uk