Tag Archives: RBA

Fall in Iron Ore Price could have ramifications for the Australlian Dollar (Daniel Johnson)

Iron Ore drops in value

Iron ore is Australia’s primary export and as such fluctuations in it’s value effect the value of the Australian Dollar. Over the past few weeks we have seen a significant fall in iron ore price. Despite this the Aussie has remained resilient against the pound. This is not to say it is not concerning, the absence of a large drop in Australian dollar value could be attributed to Sterling weakness due to the uncertainty surrounding Brexit.

RBA Meeting’s Minutes

During the early hours of tomorrow morning we will see the Reserve Bank of Australia (RBA) minutes. The minutes are released two weeks  after the interest rate decision and can give an indication as to monetary policy moving forward. If there is any hint to a raise in rates expect investors to react and we could see a significant spike in AUD value, as we witnessed recently when Mark Carney, the governor of the Bank of England when he hinted hint towards a hike for the UK in November and GBP/AUD breached 1.70.

I would be surprised if this occurred however, I expect a dovish tone. I do not think the current economic data releases from down under warrant a hike. Retail sales data recently came in at a four year low.

If you are looking at the health of the UK’s and Australia’s economies, I think Australia is in a much better situation at present. Political uncertainty and a lack of clarity on Brexit is hindering any advances made by Sterling.

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.

 

 

Why does the Australian dollar remain strong when iron ore prices continue to fall?

For regular readers they will be aware that Australia’s largest export Iron ore has a direct impact on Australian dollar exchange rates. If iron ore prices fall the trend is for the Australian dollar to fall and vice versa. However, iron ore prices have been falling recent however Australian dollar exchange rates remain resilient. There are two main reasons for this.

Another trend that has an impact on Australian dollar exchange rates is the performance of emerging markets. When emerging stock markets outpace that of developed the Australian dollar also performs well. In recent months emerging markets have been performing well and forecasters expect this trend to continue. In addition, interest rate forecasters tend to disagree with the RBA as they believe the RBA will hike interest rates throughout 2018.

Commentary from the Reserve Bank of Australia, I believe will continue to dictate exchange rates   therefore people with an upcoming Australian dollar exchange should continue to monitor developments.

Economic data releases that will impact Australian dollar exchange rates 

In the early hours of Tuesday morning the RBA are set to release their latest minutes. My personal opinion is that the Governor does not want to strengthen the Australian dollar any further and thats why he continues with the stance of interest rates won’t be raised anytime soon. It will be interesting to see if the minutes give any further insight.

Later in the week (Thursday) the latest unemployment numbers will be released. Over the last 3 years the Australian job market has gone from strength to strength and at present remains at a record low of 5.6%. The Governor of the RBA is wary that if the Australian dollar continues to strengthen the job market could be impacted however for the time being it looks like the unemployment numbers will remain at 5.6%.

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.

Australian Dollar gains a little strength after higher inflation expectations (Daniel Wright)

The Australian Dollar gained a little ground against most major currencies during trading yesterday, following news that expectations for inflation over the next 12 months had risen from 3.8% in September to 4.3% currently.

On top of this, the number of participants in the inflation survey expecting inflation to be on the up rose from 58.4% to 62.8%, with only 3.8% expecting inflation to fall.

The reason that this has led to a little Australian Dollar strength is that it increases the chance of an interest rate hike. An interest rate hike is generally seen as a positive for a currency as it makes it more attractive to investors and a cut in interest rates is generally seen as negative.

One way of slowing rising inflation is to hike interest rates, so the fact that inflation is expected to continue rising at a fairly rapid pace may well lead to the RBA (Reserve Bank of Australia) having to reconsider when they next intend to hike interest rates. At present some institutions feel that we may see a hike in early 2018 whilst others are not expecting any rate hikes now until at least 2019, the market appears to be split.

The Australian Dollar has had a fairly flat period this week against most majors, and with little data for the market to feed off of for the rest of the week I would expect this trend to continue. Next week focus will be on the RBA meeting minutes from their last interest rate decision and unemployment data too, so there is certainly potential for a lot more movement.

If you have a currency exchange to make involving the Australian Dollar and you would like me to assist you then I can, both in terms of getting you to top market rates and helping you with the timing of your transaction.

If you would like to speak with me directly about our service, and to get a live quote from me then feel free to email me directly on djw@currencies.co.uk and i will get in touch personally. We help people moving money to and from Australia for emigration and many other reasons and would love to help you too.

Will the Australian Dollar drop in value in the coming months? (Daniel Wright)

Many clients have been asking me recently where the Australian Dollar may head next, with no interest rate move on the cards in the near term and numerous global problems at present I feel that the Australian Dollar may get a little weaker in the coming months.

A recent article in the Sydney morning herald suggests that many feel the same. Much of the article is based around the U.S Dollar and Australian Dollar flows. The Federal Reserve in the States have hinted at a further three interest rate hikes in 2018 and many analysts still believe we will see very little movement on interest rates throughout 2018.

An interest rate hike is seen as positive for a currency and a cut is seen as negative, as a hike will make that currency more attractive to investors. On top of this, you tend to find that you can see a flow between USD/AUD when there are times of global issues. The Australian Dollar is perceived as a ‘riskier’ currency and the U.S Dollar still held in regard as safer haven currency.

As many regular readers will know, there are a huge amount of problems around the world at present, both in terms of economies around the world and politically too, I don’t see many of these going away anytime soon, so we may see the Australian  Dollar take a few knocks as and when there are further issues that crop up.

My personal opinion is that although the Australian economic data has been ok, the economy still isn’t flying and there is still an issue with house price inflation in many areas and that is a problem that is hard to resolve as the RBA are still not in the position to raise interest rates at present.

Overnight last night we saw extremely poor Retail Sales data for Australia, leading to Australian Dollar weakness overnight.

If you are in the position that you need to exchange Australian Dollars in the near future then I can not only help you with getting the best rate on your exchange but also with the timing of your transfer.

Should you require assistance then I am always happy to provide you a quote against your current choice for exchanging money, along with having a discussion with you to tailor a game plan for how to approach the upcoming exchange.

If you would like me to get in touch with you then feel free to email me directly on djw@currencies.co.uk and I will be more than happy to get in touch with you personally.

Will GBPAUD continue to rise this month?

The pound made considerable gains against the Australian dollar throughout September due to the Bank of England’s stance surrounding future interest rates and the dovish stance from the Reserve Bank of Australia.

Governor of the Bank of England Mark Carney announced that an interest rate hike could occur as early as November and currency speculators have purchased the pound in anticipation.

Governor of the Reserve Bank of Australian Philip Lowe confirmed that an interest rate hike anytime soon is unlikely as they do not want to see household debt rise further.

In other news iron ore prices in Austrian have been taking a tumble in recent weeks. Iron ore is Australia’s largest export and when iron ore prices fall this tends to mean the Austrian dollar follows suit. If iron ore continues to decline I expect buying Austrian dollars will become cheaper in the upcoming weeks.

Another factor that will have a major impact on GBPAUD exchange rates is Brexit developments. Currently Brexit negotiations have stalled once again as UK and EU negotiations cannot come to an agreement in regard to the divorce settlement or EU citizens rights once the UK depart the EU. This could be a story that has a positive or negative impact on the pound.

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! **

Will the Pound continue to rise against the Australian Dollar? (Tom Holian)

We have seen the Pound consistently challenge levels of 1.70-1.71 in the last fortnight with the Pound clearly finding support vs the Australian Dollar.

The UK economic data announced during September was generally speaking very positive and this has been reflected in GBPAUD exchange rates.

UK inflation has hit a 5 year high recently and this has caused the Bank of England to consider raising interest rates sooner than the market previously had expected.

Typically if inflation rises then a central bank will hike rates in order to control the problem.

However, with UK average earnings falling behind inflation then in my opinion I think an interest rate hike could cause a problem for economic growth in the future.

The Reserve Bank of Australia are due to meet on Tuesday to announce their latest interest rate decision and at the moment I think the RBA will keep rates on hold but each meeting for the last few months has caused a lot of movement for GBPAUD exchange rates.

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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Pound makes gains vs the Australian Dollar on interest rate hike rumours (Tom Holian)

The Pound has made some solid gains during the last fortnight vs the Australian Dollar creating some better opportunities to buy Australian Dollars with Pounds.

The Pound has gained owing to the suggestion that the Bank of England are making plans for a potential interest rate hike in November. It is not just against the Australian Dollar but also against a whole host of other major currencies in Sterling’s favour.

We have broken through 1.70 on the Interbank level on a number of occasions and it appears as though there is a level of support just underneath this trading level.

The next potential catalyst for GBPAUD exchange rate movement is likely to come on Tuesday when the Reserve Bank of Australia meets to announce their latest monetary policy.

I don’t think we’ll see any movement in interest rates next week in Australia but with the US likely to raise rates before the end of the year as well as the UK potentially doing something in a few weeks there is a chance that we’ll see an interest rate hike in Australia next year.

In the meantime I expect to see the Pound continue to challenge the current 1.71 range and possibly break through as we go into next month.

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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

A dramatic fall for the Australian dollar

Towards the end of last week the Australian dollar lost value against all of the major currencies due to RBA governor Philip Lowe announcing that it was unlikely the RBA would raise interest rates anytime soon.

Within my last article I suggested this would be the case, as the Governor in recent months has made it clear if the Australian dollar continues to strengthen in value, this could have a negative impact on GDP and the amount of jobs that are created.

The Australian dollar also took a tumble due to a further fall in the commodity iron ore. Iron ore is Australia’s largest goods export and over the last six trading sessions is down 13.7%. There is a direct correlation with iron ore and Australian dollar exchange rates. When iron falls exchange rates fall when iron rises exchange rates rise.

However the Australian dollar didn’t devalue much against sterling this week as Theresa May’s lack lustre speech in Florence Friday left the currency markets wanting more and therefore a sell off of sterling occurred. The PM gave no indication to how much the UK would pay the EU when the UK departs and this is what the market was anticipating.

It’s a quiet week for Australian economic data releases, the only release to look out for is Private sector credit Friday morning however this isn’t normally a big market mover. For people that are buying or selling Australian dollars this week should also analyse the other currency that you are converting.

If you are making a currency conversion in the upcoming weeks or months, I would recommend emailing me with the currency pair you are converting (AUDUSD, AUDEUR, AUDGBP) the reason for your transfer (business transaction, property purchase) and the timescales you are working to and I will respond to your email with my forecast and the process of using our company drl@currencies.co.uk.

Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.

Dayle Littlejohn

 

 

GBPAUD reaches 8 week high

The pound has been on the charge of late and GBPAUD exchange rates have reached an 8 week high!

This week UK inflation numbers rose to 2.9% which promoted the Bank of England to release a hawkish statement after the interest rate decision.  Members of the monetary policy committee hinted that an interest rate hike could occur in the upcoming months if inflation continues to rise.

Personally I believe the Bank of England have artifically strengthen sterling in a bid to curb the worrying inflation levels and an interest rate hike this year is extremely unlikely. Nevertheless the Bank of England have provided a window of opportunity for Australian dollar buyers.

This week the Reserve Bank of Australia are set to release their latest minutes Tuesday morning. I don’t expect the minutes to provide any further insight to interest rate decision moving forward as the Governor will not want the Australian dollar strengthening any further in the upcoming months due to speculation.

Later in the week UK Prime Minister Theresa May is set to deliver a speech in Florence outlining life after Brexit. EU Parliament negotiator Guy Verhofstadt has exclaimed the UK Prime Minister will make an “important intervention” and if this is the case GBPAUD could rise or fall dramatically. The problem clients have that are converting GBPAUD is trying to predict Theresa May is impossible.

If you are trading GBPAUD in the upcoming weeks, months or years and want to save 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! **

Will the RBA raise interest rates anytime soon?

Earlier this week the Australian Bureau of statistic released the latest jobs numbers which impressed for the Australian dollar. 54,200 jobs had been created up from 27,900 in July, and the prediction was for a figure below 40,000. Earlier in the month inflation numbers pushed past the Reserve Bank of Australia target rate, therefore pressure is mounting on the Reserve Bank of Australia to provide further information on monetary policy going forward.

Personally I expect the Governor to continue to deflect speculation that an interest rate is on the horizon as further Australian dollar strength could lead to a downturn in the economy and the amount of jobs being created according to the Governor himself.

My opinion is that if economic data continues to impress for the remainder the likelihood is that the RBA will tighten monetary policy early next year. This week HSBC have made similar predictions that an interest rate will occur in quarter one of next year.

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.