Tag Archives: RBA

A warning from the RBA

The Australian dollar has been the fourth best performing currency out of the top 10 most traded currencies and is 10.2% stonger on average against all of the major currencies since that start of the year. However Governor of the Reserve Bank of Australia announced last week that he believes the Australian dollar is overvalued and it’s only a matter of time until this starts to have a negative impact on the Australian economy. The Governor beleieves  GDP growth, inflation could start to fall and jobs might be at risk.

Friday morning the Reserve Bank of Australia released their latest monetary policy statement and the central bank reacted to the overvalued Australian dollar by cutting growth forecasts up until the end of the year by 0.5%. However the Reserve Bank of Australia announced that they are optimistic that economic growth would recover over the next 12 months as long as the currency did not continue to strengthen further.

For clients that are selling Australian dollars to buy pounds, I don’t believe the RBA are in the position to cut interest rates in a bid to devalue the Australian dollar however I expect at any opportunity the Governor of the RBA will talk down the currency in a bid to devalue it, a common practice known as jawboning. As exchange rates have improved 10 cents since the start of June and with such an uncertain time ahead this spike in the market may be worth taking advantage of.

If you are trading GBPAUD this week, month or year I would recommend emailing me with the the reason for the transfer (company goods, property purchase) and your timescales and I will response with the options available to you drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **

Pound to Australian Dollar improves despite IMF downgrade, is this a sign that the Pound is oversold? (Joseph Wright)

I wrote last week about how some analysts as well as members of the Reserve Bank of Australia are becoming concerned that the Aussie Dollar is becoming overvalued and higher than it perhaps should be, and I believe we will continue to hear similar commentary in the upcoming months.

Earlier in the year the Pound to Aussie rate hit the mid 1.70’s whereas the pair are now trading closer to 1.50 than 1.60. Since the Brexit the lowest the pair have fallen to is to a mid-market level of 1.59 so i don’t think we can rule out another move to these low levels as we don’t require the GBP/AUD pair to do something they haven’t in recent history.

In the early hours of this morning the Pound started off on the back foot after the International Monetary Fund (IMF) downgraded both the UK and the US growth forecasts for the rest of this year.

Throughout the day though the Pound has climbed, not just against the Aussie but across the board as the Pound as gained against all major currency pairs today.

Despite this boost I think that we could see the Pound trade at lower levels, especially if the UK inflation rate continues to under-perform and the likelihood of a rate hike from the Bank of England continues to dwindle.

If you have a 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.

Austalian dollar soars against sterling (Dayle Littlejohn)

Earlier this morning the Australian dollar spiked against sterling by over 1.5%, when the Reserve Bank of Australia released their latest minutes. Investors piled into the Australian dollar off the back of the news that the cash rate could increase to 3.5% from 1.5% and not have a negative impact, which implies the RBA could also think about raising interest rates in the months to come.

Personally I think this is a spike in the market to take advantage of for Australian dollar sellers buying pounds as I believe the Australian dollar is overvalued. This is supported by the National Australian Bank who released an article last week with similar views. With the property market being over inflated in certain major cities (especially east coast), I find it difficult to see how the RBA will alter the interest rate.

If they make the cut this will entice people to take out larger mortgages where as a hike would strengthen the Australian dollar further and in turn have a negative impact on Australian exports.

Looking further ahead Australia are set to release their latest Unemployment rates and Employment change numbers Thursday morning. Unemployment numbers are set to slightly rise therefore some of the gains we have seen this morning could be reversed.

As for the pound UK inflation is released in 30 minutes. If the figure exceeds 2.9% this could put further pressure on the Bank of England to raise interest rates and again some of the gains for sterling buyers could be lost. To find out how the inflation numbers impact the market feel free to email me and I will let you know the outcome later this morning.

If you are trading GBPAUD in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Rate to buy Australian Dollars with Pound rises (Tom Holian)

The rates to buy Australian Dollars with Sterling has increased during Friday’s trading session after the US inflation data came out lower than expected.

It has already been an interesting week for GBPAUD exchange rates with interest rates having been a key topic in the UK, US and next week in Australia.

The Aussie Dollar is heavily affected by what happens in the US as it will influence global attitude to risk.

With the US posting lower than expected inflation levels this could suggest that an interest rate hike in the US may not be coming as soon as many expect and this has caused a sell off for the US Dollar in favour of the Pound which in turn has caused the Pound to rise against the Australian Dollar.

Next week on Tuesday the Reserve Bank of Australia will announce their latest minutes from their interest rate decision held earlier this month.

The RBA were rather neutral in their stance as to what to do next so further evidence of this in my opinion could see Sterling challenge 1.70 levels against the Australian Dollar by the middle of next week.

If you’re intending making a large currency exchange 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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

 

Australian dollar overvalued? (Dayle Littlejohn)

In recent times major central banks including the European central bank, Bank of England, Bank of Canada and the Federal Reserve have been taking a hawkish approach and indicating that they could be raising interest rates in the near future. When a central bank raises interest rates we tend to see the currency strengthen as investors flock to the currency.

However the tone from the Reserve Bank of Australia was far from hawkish when they released their latest monetary policy decisions over a week ago. The National Australian Bank believe that the Australia dollar is overpriced at present and if the RBA gave a hawkish statement the dollar would be purchased further and therefore increase in value.

Looking further ahead the NAB believe the Federal reserve will continue to raise interest rates which will mean investment will leave the Australian dollar and strengthen the US dollar, and I have to agree with the predictions.

In relation to GBPAUD exchange rates I expect the Australian dollar to devalue slightly however the golden question is whether this will outweigh Brexit? I fear at any point Brexit negotiations could reach a stumbling block and therefore the pound would weaken dramatically.

If you are buying or selling Australian dollar in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

What factors could cause the Aussie Dollar to weaken? (Joseph Wright)

Last week the Pound found itself under pressure after a raft of bad data out of the UK has resulted in concerns in a slowing down of the UK economy.

Data showed slowdowns in the manufacturing, construction and importantly the services sector and although the readings were in line with previous readings when GDP is running at 0.4%, the economy is slowing as we enter the 3rd quarter which is a negative sign for those hoping the Pound will climb as the year progresses.

The Reserve Bank of Australia disappointed Aussie Dollar bulls and those hoping the Aussie Dollar will climb last week. Many had hoped for indications of future interest rate hikes from the RBA but these comments never came, with many analysts now confident of a rate hike this year.

The price of Iron Ore has firmed up recently offering AUD some support, but the mixed messages the markets are receiving regarding China’s economy (and whether or not the figures they release are 100% truthful) is likely to weigh on the Aussie Dollars value.

The issues surrounding the housing market overheating in parts of Australia is also likely to be a talking point, and it’s quick market movements that we can help our clients take advantage of in a number of different ways, so feel free to get in touch if you wish to discuss this in further detail.

If you have a 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 Forecast – Is the Australian Economy Heading for a Collapse? (Matthew Vassallo)

GBP/AUD rates are still trading above 1.70 but the AUD has found support, after Sterling broke through 1.71 yesterday.

The AUD has fought back, gaining over a cent at the high, as the markets prepare themselves for a busy day of economic data releases.

At 09.30 the latest Manufacturing & Industrial Production figures are released. With an improvement on last month being anticipated by investors, it will be interesting to see whether any positive news has been factored into Sterling’s current value.

Trade Balance figures are also released shortly and this shows how much we spend on imports, compared to the money we make on exports. This is a key barometer for any economy and as such any clients with a GBP or AUD requirement should be keeping a close eye on developments. These figures will be monitored even closer over the coming months, as the UK separates itself from the EU and will be used to gauge how any new trade deals are faring.

However, it will be the latest NIESR Gross Domestic Product (GDP) estimate alongside Carney’s speech, which could shape GBP/AUD rates for the subsequent days.

Any further bullish comments regarding future rate hikes, or a positive reading from NIESR could help Sterling break back through 1.71.

Similarly, any negative reading or diluted comments by Carney could push the pound back down and the recent gains could be eliminated extremely quickly.

Looking at the Australian economy and on the surface, it seems to be performing well. China’s economy has stabilised and this has boosted Australia’s affluent export industry, which in turn has helped to support the AUD’s value.

However, a concerning report released overnight has suggested that Australia’s economy is heading for a potential “economic collapse”, according to former economic & policy adviser John Adams. He had urged the Reserve bank of Australia (RBA) to take pre-emptive action by raising interest rates to prevent Australia’s expanding household debt bubble from exploding and now feels it is too far gone to recover.

Whilst this is one man’s opinion, any negative reports such as these can have a detrimental effect on market perception of an economy and the AUD could suffer over the coming days as a result.

The current market remains as unpredictable as ever, which is why I have been advocating that my clients take advantage of any short-term gains and protect their positions where possible.

I have little confidence in the current UK government producing a Brexit deal that will propel the UK economy forward and with the potential problems facing the Australian economy, are you prepared to risk your currencies value and gamble during such uncertain times?

We are able to help guide our clients through the current market, helping them time their currency exchange to maximise the market value available.

Our award-winning exchange rates, mean that even on a falling market clients will extract the most value and we can also keep you posted with key market developments ahead of any prospective transfer.

Please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt, or alternatively I can be emailed directly on mtv@currencies.co.uk

How the Bank of England and Reserve Bank of Australia could impact GBPAUD exchange rates (Dayle Littlejohn)

For people that are reading this website for the first time as they need to purchase a substantial amount of Australian dollars for a business related matter or a property purchase it’s is important to understand that interest rates have a major impact on the currencies value.

Earlier this week the Reserve Bank of Australia’s minutes confirmed the RBA are unlikely to hike rates anytime soon. This was a surprise as the Governor of the RBA gave a hawkish press conference last week and many economists had been speculating that Australia could follow in the US footsteps.

It was important to note the RBA did confirm it is unlikely rates would be cut further as, more liquidity in the housing market would have a detrimental impact on the Australian dollar longer term.

The message the RBA gave earlier this week is slightly different to the Bank of England’s. Inflation levels have risen above the BoE 2% target and members of the Bank of England are now calling for an interest rate hike. Nothing has been confirmed however speculation is rising and a hike looks likely towards the end of the year or early 2018.

Therefore looking ahead the pound could trend higher against the Australian dollar if we only looked at interest rates, however there are many factors that influence exchange rates. For example Brexit negotiations are on going and if these negotiations grind to a halt which I think is likely we could see substantial falls in the pounds value.

When converting GBPAUD exchange rates it is important to understand political events are having more of an impact than economic data therefore it is very difficult to predict the future. My job is to outline the options to clients with the potential upcoming economic events, and the client makes the decision of when to convert.

If you are buying or selling Australian dollars and would like to know your options and have access to fantastic exchange rates feel free to email me on

If you are trading GBPAUD in the upcoming weeks, months or years and want to know your options whilst saving money feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

 

Could the Pound vs the Australian Dollar make a sustained break past 1.70? (Tom Holian)

The price to buy Australian Dollars with Pounds has broken through 1.70 on a number of occasions through out today following the Reserve Bank of Australia’s decision to keep interest rates on hold.

May investors were hoping for more of a hawkish tone which means an interest rate hike but the RBA was rather cautious and stayed very neutral with its announcement.

Australian interest rates are currently sitting at 1.5% which is the lowest they have ever been and as they were kept on hold this has seen the Pound making gains vs the Australian Dollar.

The RBA are also concerned with how strong the Australian Dollar is against both the USD and the Pound and if they suggested an interest rate hike could be coming this could result in further strength for the AUD vs the Pound.

RBA governor Philip Lowe has stated that ‘consumption growth remains subdued, reflecting slow growth in real wages and high levels of household debt.’ These combinations mean that any rate hike could cause problems for the economy down under hence the soft rhetoric.

Indeed, any suggestion of any interest rate change coming was not mentioned so for me I think we could see further short term gains for the Pound vs the Australian Dollar coming soon.

The next catalyst for GBPAUD movement could come on Thursday with the release of the latest Australian Trade Balance data so keep a close eye out for what happens.

Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident of being able to save you money on exchange rates compared to using your own bank when buying or selling Australian Dollars.

If you have a currency transfer to make and would like to save money then email me directly with a quick description of your requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

GBPAUD breaks through 1.70 (Dayle Littlejohn)

In recent weeks the pound has been losing ground against the Australian dollar and exchange rates have fallen from 1.75 to 1.67. However today Governor of the Bank of England Mark Carney has given Australian dollar buyers something to smile about, as UK interest rates could be hiked in the upcoming months, which would provide strength for sterling as investors look for higher returns on their investments.

The Governor announced today that the MPC will be debating interest rates in the upcoming months and a rate rise all depends on business investment, wage growth, Brexit negotiations and costs for labour.

Off the back of the positive news for the pound GBPAUD has now breached 1.70. To put this into monetary terms the 3 cent improvement this week will save clients £10,000 when purchasing 1,000,000 Australian dollars.

Looking further ahead I expect the pound to continue the upward trend for the remainder of the week and into next week as UK Prime Minister Theresa May should be able to put the election behind her when MPs vote on the queens speech later this week.

The leader of the opposition Jeremy Corbyn has stated he will try to make amendments to the Queens speech but in reality I can’t see any conservative MP voting against their own party, therefore this story should be over by this time next week.

If you are buying or selling Australian dollar in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **