Tag Archives: reserve bank of australia

Pound to Australian Dollar Forecast – Further interest rate cuts planned in Australia

Will Boris be the next Prime Minister?

The Tory leadership election is now down to the final two with Boris Johnson due to go head to head with Jeremy Hunt.

Johnson has been the clear leader since the votes began and the strong likelihood is that he’ll become the new Tory leader when it is officially announced on 22nd July. Johnson won the ballot with 160 votes compared to Hunt with 77. Therefore, unless Johnson makes a calamity in the next month I cannot see why he won’t win.

This has given the Pound some support against a number of different currencies but we are still in a fairly uncertain period for the Pound as we still do not what will happen with Brexit.

Australian interest rates to be cut again in 2019

In the meantime turning the focus back towards what is happening in Australia and things are not going well down under.

Following the federal election which gave the Australian Dollar a brief period of respite the currency has started to weaken again.

The Australian Dollar is close to its lowest level against the US Dollar in history and has started to weaken once again vs the Pound.

Blackrock Inc has shorted the Australian Dollar as they expect that the Reserve Bank of Australia will cut interest rates to 0.5% from the current levels of 1.25%. Australia has been one of the benefactors of having a highly competitive interest rate so with further interest rate cuts expected I think this could have a big impact on the value of the Australian Dollar.

The Australian Dollar has also felt the impact of the ongoing US-China trade wars which appear to have little signs of ending soon. As China is one of Australia’s leading trading partners any slowdown in the world’s second largest economy can often effect the value of the Australian Dollar.

RBA governor Philip Lowe has claimed that the most recent interest rate cut was an attempt to cut unemployment levels as well as helping inflation but I agree with both Blackrock and the Commonwealth Bank of Australia that there are further interest rate cuts coming during 2019.

Therefore, if you’re considering selling Australian Dollars it may be worth getting things organised in the near future.

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

Tom Holian teh@currencies.co.uk

Will further interest rate cuts result in a drop for the Australian Dollar this year?

The Australian Dollar has continued to come under pressure recently which has helped the Pound recoup some of its recent losses against the currency. One of the reasons for the downturn for AUD is due to the interest rate cut that took place earlier this month, which has pushed Australian interest rates down to record lows. There are now predictions of further rate cuts from the Reserve Bank of Australia with some financial institutions predicting two further cuts this year, which would push the rate down to 0.75% and likely have a negative impact on the Aussie Dollars value.

Aside from these forecasts of rate cuts due to the slowing economy, another reason for Aussie Dollar weakness is due to the ongoing US-China trade war saga, which has caused concerns for the Australian economy moving forward. I would expect to see AUD exchange rates continue to struggle whilst this continues, owing to the fact that China is the countries main trading partner.

From the UK side the Conservative leadership contest is likely to remain the key driver, with Boris Johnson remaining the front runner. This leadership contest along with any Brexit related updates remain the key driver for GBP exchange rates so do keep on top of this if you’re following the Pound’s value due to an upcoming currency requirement.

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.

Will the Pound improve against the Australian Dollar?

The Pound has this week fought back against the Australian Dollar. With the RBA having cut interest rates the focus now appears to be on Australian unemployment. The figures showed a problem with the jobs market down under which signals that the Australian economy is under some real pressure at the moment.

The average house price has also been falling in Australia and this is beginning to weigh heavily on the value of the Australian Dollar.

Next week the focus will turn back to the Reserve Bank of Australia when the latest minutes are released.

This will provide an insight as to what the central bank are looking to do in the near future concerning monetary policy.

I think there are more interest rate cuts planned this year so if the RBA gives hints that there may be more coming in the near future I think we could see GBPAUD exchange rates move in an upwards direction.

Therefore, if you’re planning to buy Australian Dollars in the near future it may be worth waiting until the middle of week to take advantage of any potential spikes in the market.

The other news affecting the rates is that of the UK’s leadership election. Currently Boris Johnson appears to be the front runner after winning the first round conclusively. If he manages to get into power this could potentially give the Pound a boost against the Australian Dollar as it will provide some certainty at least in the short term.

I have worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers and I am confident of being able to save you money when buying or selling Australian Dollars.

If you have a currency transfer to make 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

 

Australian dollar forecast: Will the RBA cut their interest rates again?

The Australian dollar is weaker this week, following the news that Australian employment data, whilst reasonably positive, was not inspiring enough to majorly turn the tide on the Australian currency. With the outlook on interest rates shifting following very poor GDP (Gross Domestic Product), which recently came in at a decade low, the Reserve Bank of Australia might well be looking to cut their interest rates once again ahead.

I am concerned about some of the more global issues that will influence the Australian dollar too, the prospect of the trade wars deteriorating ahead could be a major concern for the currency. It is likely that the Australian dollar will suffer as investors are fearful over the slowdown in the Chinese economy, this weekend’s G20 Summit will be key in determining what happens next.

If you are looking to buy or sell the Australian dollar, making some careful plans in advance is usually a good idea to try and help mitigate the uncertainty. As a commodity currency, the Australian dollar will often rise and fall on the waning attitudes to global risk and trade. Donald Trump is a real wildcard here and his constant to and fro on the trade wars, is harming sentiment.

Next week, is a series of important economic releases with the Governor of the RBA, looking to make a speech plus the latest RBA Meeting Minutes. In providing information on what lies ahead, we will learn of the latest news and developments we might expect. I predict that Lowe will have to keep the door open to further cuts and this could see the Aussie weaker.

Looking at the general trend and trajectory on the trade wars, I think the Australian dollar could lose more ground ahead. Expectations are mixed over what to expect this weekend, any signs of agreement between Trump and China, could provide some shorter-term relief for the Aussie. However, I do feel that any improvement in sentiment will only be short-term, and there will continue to be a longer net negative concern from the trade wars which will affect the Australian dollar.

Thank you for reading my post and should you have a Australian currency transfers that you wish for assistance with, I would be most interested to hear from you and discuss strategy to assist with the best rates and timings.

Jonathan Watson

jmw@currencies.co.uk

Australian dollar forecast; Will the RBA cut rates again?

The Reserve Bank of Australia cut their base interest rate recently which has seen the Australian dollar weaker in recent weeks. Interestingly, the currency itself did not weaken massively on the news of the cut to historical lows last week, partly because the market was expecting it. It appears to me that the future, we might well in find the RBA forced to cut rates again.

My overall belief is that the factors which contributed to a weaker Aussie dollar in 2019 will by and large remain. A key factor in all of this is of course the trade wars with Donald Trump putting pressure on the global economy, in particular the Chinese economy which is a major customer for Australian exports.

The resulting slowdown globally is only going to continue in my opinion, this will surely keep pressure on the RBA and perhaps force their hand again down the line. It is probably worth pointing out that the Australian economy has been through one of the longest periods of economic growth in history in the Western world. Economic history suggests that at some point that growth will struggle with tougher economic times and the current trajectory and stagnation seems tricky to just shake off with just one interest rate cut.

There is important economic news for Australia this week with the release of the latest news from the Australian Bureau of Statistics, releasing more detailed information on Australian Unemployment data. This has been a key component of decisions on interest rates, as the RBA grapples with falling Unemployment and also falling Inflation.

The future looks far from straightforward for the Australian dollar, clients with a position to buy or sell Australian dollars might benefit from a quick review with our team, to get the latest news and information on their options and the best strategy to maximise any transfers.

Will the RBA cut interest rates and the impact on the Pound vs the Australian Dollar?

The Pound has really been struggling against the Australian Dollar in recent weeks owing to the ongoing political uncertainty in the UK.

The Pound is now trading at its lowest level against the Australian Dollar in a few weeks and I think we could see further losses ahead for Sterling exchange rates.

Next week the Reserve Bank of Australia will once again meet to decide the future of monetary policy down under.

With the Australian economy coming under more and more pressure recently there is a strong likelihood that we’ll see a cut in interest rates on Tuesday morning.

As this is widely anticipated it may not have the impact on exchange rates that you may think so if you’re banking on a big movement for GBPAUD exchange rates it may not happen.

The main thing to look out for will be the statement from the RBA as if they hint that there are more interest rate cuts planned for the future then this could weaken the Australian Dollar so make sure you pay close attention to the announcement.

Indeed, some analysts think that the RBA should cut interest rates by 0.5% but I think that would be too aggressive for the time being.

We also have the release of Australian retail sales due out on Tuesday morning. Retail sales are a good indicator as to the health of an economy so any further signs of a slowdown will provide the RBA with further justification to cut interest rates.

Then on Wednesday we have another big data release for Australia with the latest GDP data for the first quarter. The expectations are for growth of 2.5% which would be an improvement from the previous quarter of 2.3% for year on year so we could see some volatility for GBPAUD exchange rates during the middle part of next week.

If you have a currency transfer to make and would like to save money when buying Australian Dollars then contact me directly for a free quote and I look forward to hearing from you. I have worked for one of the UK’s leading currency brokers since 2003 and I’m confident that I can also help you with the timing of the trade.

Tom Holian 

teh@currencies.co.uk

 

Australian dollar forecast – Increased volatility set to continue…

The Aussie dollar is being pulled in many different directions at present, as the market is encouraged to consider and take onboard many factors in its assessment of the value of the currency. Domestic economic and political concerns are high ahead of the Australian election this weekend, as are global concerns over trade wars and the impact on the Chinese economy. The Aussie dollar is softer this May under the pressure of such events, and I think may well lose further ground.

The elections this weekend could well see the Labour Party winning the election as their messages on climate change and improving health and education spending appear to hit the right notes with voters. This might well see the Australian dollar weaker after the weekend, since it is expected the increase in spending, might lead to worse economic performance and increase pressure on the Australian central bank, the RBA (Reserve Bank of Australia), to cut interest rates.

Looking forward, investors with a position to buy or sell Australian dollars might wish to be making some plans ahead of the election this weekend to try and protect or manage their position. You can email myself Jonathan Watson on jmw@currencies.co.uk to learn more about this if you wish.

Will the Australian dollar weaken further?

Another concern for me would be the escalating trade wars which so far has seen the US and China, both raise tariffs on each other’s good. Trump has now levied 25% tariffs on US$200 bn worth of Chinese goods, whilst China has retaliated with between 5-25% tariffs on US$60bn worth of goods.

This just adds to the uncertain picture ahead for the global economy and I would expect will lead to a weaker AUD. Whilst the immediate sell off on stock markets and currencies seen earlier this week has been stemmed, with such investments staging a small comeback yesterday, the longer term outlook does not appear rosy.

The Australian dollar is very much supported by a strong global economy, in particular by China and its demand for raw materials. The increased uncertainty globally has seen the Australian economy struggle with inflation at a 16-year low, thereby putting pressure on the RBA to cut rates.

May is presenting much potential for the Australian dollar to come under some pressure, clients with a position to buy or sell Australian dollars might benefit from a quick review with us to discuss the best strategy moving forward. Please feel free to contact myself Jonathan Watson on jmw@currencies.co.uk to discuss more about what might suit you best in this market.

Thank you and I look forward to hearing from you.

Australian dollar forecast : Australian dollar remains in the firing line!

The Australian dollar was always looking like it may struggle in the month of May, and so it has proved to be the case. A series of domestic and global events have all led to increased pressure on the Australian currency, as investors fear over the more immediate political and economic outlook.

On the side of the domestic issues facing Australia, there are numerous economic concerns including inflation being at a 16-year low with stagnating Unemployment a further concern. The Reserve Bank of Australia (RBA) has because of this been under pressure to cut interest rates and it is widely expected will cut at future meetings.

The raising and lowering of interest rates is a big factor in the strength and weakness of a currency, the current projection for lower interest rates down under will only serve to put more pressure on the currency in the future.

Politics is also key in Australia with the national elections due on the 18th May, there is a concern this could be a Labour government which would potentially see the Australian currency weaker. There has been a growing concern over the economic outlook and a Labour government and their spending plans could easily see a weaker currency.

Finally, the global events which are also concerns for the Australian dollar are numerous. This includes the trade wars between the US and China which could see the lack of any agreement weighing on global sentiment and hamper trade confidence in the global economy. As a global currency, the Australian dollar will weaken in times of uncertainty over the global economic outlook and the trade wars are a great example of this.

Moving forward, the Australian dollar looks like it will remain under some pressure and could easily weaken further. A sudden change in sentiment could easily develop however, and clients looking to predict and track movements on this currency should be aware of the potential for a sudden reversal.

To discuss strategy and ensure that you are fully up to date with the latest trends and themes in the market, please don’t hesitate to contact me Jonathan Watson to discuss further on jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from you.

Pound Sterling close to 3 year highs against the Australian Dollar

The Pound is now trading at close to its best level to buy Australian Dollars with Sterling since June 2016 when the Brexit vote took place.

The Pound has increased in value against the Australian Dollar at the end of the week as the cross party talks between the Labour party and the Tories appear to be making progress.

Following the dismal local election results earlier in the week senior Tory members are urging the party to take things further and deliver Brexit.

Indeed, Prime Minister Theresa May has made it clear that the public wanted ‘to see the issue of Brexit resolved.’

With Theresa May insisting that the cross-party talks are concluded by next week this could see Brexit get closer to being delivered than some may expect.

I am still doubtful that Brexit will take place as even if the talks between the two parties improve then they will still have to get it through the House of Commons who have so far shown little interest in approving the EU Withdrawal Agreement.

Turning the focus back towards the Australian Dollar I think we could potentially see the Pound hit 1.90 and above this month as there are a number of major events taking place during May.

We start on Tuesday with the Reserve Bank of Australia meeting to announce their latest interest rate decision. The rumours have been increasing recently that the RBA may be looking to cut interest rates and even if a rate cut does not take place on Tuesday I think that the RBA may adopt a relatively dovish tone and suggest that they are gearing up to cut rates.

One of the only reasons why I think an interest rate cut may not happen next week is that Australia is due to go to the polls this month on 18th May.

Generally speaking when an election takes place this often results in uncertainty for the currency involved and this is why I think we could see the Pound increasing against the Australian Dollar in the near future.

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

Tom Holian teh@currencies.co.uk

 

GBP/AUD hits 1.85 as markets await a busy Thursday for UK data releases

The Pound’s value is rising across the board of major currency pairs today, with GBP/AUD hitting levels as high as 1.8527 at its highest level so far today.

Sterling had begun the day positively and it was boosted around 9.30am this morning as Manufacturing data came out slightly better than expected, with the forward looking Purchasing Managers Index (PMI) figure showing a positive reading of 53.1 meaning that there is an improving outlook within the industry at the moment.

With the chances of an imminent Brexit with no trade deals in place now a lot less likely due to the extension the UK has been given, sentiment surrounding the economy is picking up and not only has this been reflected within today’s manufacturing data release, but also within the property market which saw another slight gain this month and a small year on year improvement of 0.9% despite the uncertainty.

Tomorrow there will be a raft of economic data released around lunchtime by the Bank of England as the BoE’s interest rate decision along with comments afterwards from BoE governor Mark Carney providing an insight into the monetary policy plans moving forward.

Whilst the Pound has been climbing, the Australian Dollar hasn’t been helped as some disappointing data out of China for April has softened the Aussie Dollars value across the board. Those of our readers hoping for a stronger Aussie Dollar should be aware of this due to the interconnectedness of the two economies.

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.