Tag Archives: reserve bank of australia

Pound makes gains vs the Australian Dollar after Turkish issue and UK inflation data due out (Tom Holian)

The Pound has made some gains vs the Australian Dollar over the last few days and the move appeared to happen following the news in Turkey that Donald Trump has imposed an addition to tariffs on both steel and aluminium on Turkey and this started to cause huge problems in the country.

The Turkish Lira has dramatically weakened in value over the last few days and this has caused a number of commodity based currencies to weaken as global investors have sold off riskier based currencies including the Australian Dollar.

After briefly flirting with rates in the 1.73 levels recently the Pound vs the Australian Dollar is now back to trading above 1.76.

Meanwhile, the Reserve Bank of Australia confirmed recently that it will be keeping interest rates on hold while it waits for economic growth to improve and this has also helped the Pound to make gains vs the Australian Dollar and the Australian Dollar is now at its lowest level vs the US Dollar in two years.

The RBA does not appear to be too concerned with the value of the Australian Dollar and because it is a big export market if the AUD continues to weaken then this could help to improve economic growth in Australia.

The UK and the Pound has had a good start to the week against a number of different currencies with the news that UK unemployment is close to its lowest levels since 1975 with the figure now sitting at 4%.

We could be in for further movement later this morning with the release of UK inflation data due to be published at 930am.

Inflation has been a big factor in the Bank of England’s recent decision to increase interest rates and with the data expected to show 2.5% year on year which is above the 2% target then this could provide further evidence in support of further rate hikes in the UK which could help to move GBPAUD exchange rates in an upwards direction.

If you would like a free quote or further information about how to save money compared to using your own bank when converting Australian Dollars then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk 

 

 

Australian Dollar continues to lose value as inflation levels stall

The financial markets don’t expect to see the base rate of interest change down under until the end of next year according to futures markets, and this is perhaps one of the reasons behind the Aussie Dollars weakening currently.

If the Reserve Bank of Australia (RBA) doesn’t amend rates the AUD will lose competitiveness as we’ve already seen, as the likelihood of investors holding assets in the currency diminishes owing to the less competitive of the currency. The US Dollar on the other hand has benefited greatly from its more aggressive monetary policy and the greenback has strengthened by such an extent that US President, Donald Trump has voiced his concerns.

The latest bout of Inflation data out of Australia shows that inflation has risen by 2.1% over the past year, which is slightly lower than what economists were expecting. There doesn’t appear to be much momentum regarding Australian inflation levels which is perhaps the reason behind the low expectations of a rate hike in the short-term future.

Although the Pound has been under pressure in recent months owing to the Brexit plan uncertainty, the Pound to Aussie Dollar rate is still towards the top end of it’s longer term trend, which demonstrates the pressure AUD exchange rates have come under. The GBP/AUD pair is likely to be driven by both monetary policy and UK based politics as the UK is going through a crucial time due to the Brexit.

Those monitoring the Aussie Dollars value should also pay attention to US President, Donald Trumps trade tariff’s plans as AUD has come under pressure owing to these concerns. With the Australian economy being reliant on global demand a slowdown to the global economy is likely to have a negative impact the Australian Dollars value.

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.

GBP/AUD no longer testing 1.80, is a move down into the lower 1.70’s now likely?

After testing the 1.80 mark for a number of weeks, the Pound has recently slipped from these high levels and now the pair are trading closer to 1.75. The 1.80 level does appear to be a resistance and for some time now Sterling sellers would have been best to target their transfers when the mid-market level is as close to 1.80 as possible.

Uncertainty surrounding the UK governments Brexit plans and whether they will be agreed upon in time is behind the drop in the Pound’s value. The fall hasn’t just been against the Aussie Dollar but also against many other major currency pairs with the fall against the US Dollar being one of the most dramatic, as it’s hit a 10-month low.

This week it’s emerged that the Australian jobs market is alot healthier than expected after a substantial amount more jobs were created in May than expected. This has boosted the Aussie Dollar as up until this week the average amount of new jobs was just 16,000 monthly.

One potential downside for the Aussie Dollar is the lack of movement with regards to monetary policy, as the Reserve Bank of Australia doesn’t plan on amending interest rates this year.

With many major economies beginning to make the hikes the Aussie Dollar may lose value as investors opt not to hold funds in AUD.

With little economic data out of Australia for the remainder of the week, our readers have time to get in touch and plan around transfers next week. Do feel free to get in touch if you would like to discuss next week’s economic data releases and how they could impact the rates.

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.

GBPAUD remains range bound

Over the last 30 days GBPAUD exchange rates have fluctuated in the higher 1.70s with minimal movement as both currencies seem to have been devaluing at the same pace. At the latest Reserve Bank of Australia meeting officials showed concern in regards to the trade tariffs that have been imposed on China by the US. The Australian know that a slowdown in China will have an impact on the Australian economy. Furthermore the International monetary fund have waded into the debate and announced an all out trade war will end up costing the global economy over $430bn.

UK Prime Minister Theresa May is under extreme pressure and last night threatened Tory rebels that she would call a general election if the amendment in regards to the customs union went through the Commons. The uncertainty of another General election would certianly weigh on the pounds value. Furthermore Governor of the Bank of England Mark Carney also failed to help the pounds value yesterday, as he stated a Brexit no deal would mean the Bank of England would have to rethink their future plans.

At the end of the week, UK politicians break for the summer holidays, therefore I expect Brexit related news to go quiet for a few weeks. All eyes will turn to the Bank of England’s interest rate decision early August. The market has been pricing in a hike, however I expect the Bank of England will fail to deliver which will mean sterling takes a hit. Therefore I wouldn’t be surprised to see GBPAUD fall back towards the mid 1.70s over the next month.

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.

Trade Wars and Brexit dictate GBP/AUD (Daniel Johnson)

GBP/AUD – GBP/AUD currently remains range bound between 1.75-1.80. The outlook for both currencies is not necessarily the best. The Australian Dollar will find it hard to find a momentum due to the ongoing trade war between China and the US. Australia has a heavy reliance on China purchasing it’s exports, particularly iron ore. The tariffs imposed by the Trump administration are quite severe and with China threatening to match US tariffs Dollar for Dollar this will hit both economies hard and in turn the Australian Dollar.

During times of global economic uncertainty investors tend to avoid commodity based currencies in favour of safe haven currencies. Despite the US initiating the trade war, the US Dollar is proving to be the destination of choice. 10yr treasury bonds currently offer the best returns seen in years and the Federal Reserve have the intention to hike interest rates a further two times by the end of the year.

I feel the trade war with China could be sustained despite the US holding the majority of the cards.

From the UK side, Brexit negotiations will be key the the value of Sterling. Theresa May’s Brexit proposal has taken criticism as it goes against how Brexit was sold to the public.

The proposal includes a free trade deal for goods and agricultural products. This would essentially keep the UK’s rules and regulations aligned with those of the EU. This would allow trade in goods to flow freely and the Irish border would remain open.

The proposal for services however will be different. The UK would like to take back control of services, particularly the financial sector. Services make up 80% of UK GDP. This would result in more barriers for companies’ trading aboard.

The risk of course is that financial services will move abroad. This is a serious concern as the tax income from the financial sector is huge. May intends to reform the existing equivalence regulation where temporary customs union access is granted, but can be removed at anytime. This situation does not fill me with confidence.

Merkel has apparently agreed to a deal behind closed doors.

If the trade war escalates then we could see GBP/AUD breech 1.80 although I do think this would be a long shot. aim to trade in the 1.79s if you have an Australian Dollar requirement.

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.

 

Hawkish Bank of England comments push the Pound higher, will GBP/AUD breach 1.80 again soon?

Despite the Pound to US Dollar rate trading at a 7-month low against the US Dollar, the currency has actually been boosted against most major currency pairs today.

The reason for the boost to the Pound to Aussie Dollars value can be put down to the Bank of England’s comments and the voting pattern of the Bank of England members. The Aussie Dollar lost a lot of value against the Pound today which is why the focus of this blog is on that particular pair.

There are now 3 members of the Bank of England that wish to increase interest rates in the UK, and this is one of the reasons for today’s boost to Sterling exchange rates. The highest the GBP/AUD pair have hit today is 1.7979 although the pair have since slipped off which to me demonstrates that there may be resistance at the 1.80 mark as we’ve previously seen.

There isn’t expected to be any rate hikes from the Reserve Bank of Australia until next year, so I do think that the Pound will climb against AUD should the hints at a rate hike later in the year from the BoE materialise.

With a quiet end to the week in terms of data I’m expecting to see AUD exchange rates driven by sentiment.

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.

Could the Pound make further gains this week against the Australian Dollar?

According to many sources the Australian Dollar could be under real pressure in the long term as the Chinese economy continues to slow and the US Federal Reserve continues on their path of raising interest rates.

The Fed has already raised rates 7 times since December 2015 and have already increased rates twice during the course of this year as well.

The Australian Dollar has hit its lowest point vs the US Dollar in twelve months and this has also been caused by the ongoing Trade Wars between the US and China.

The Australian bond yields have now dropped below that offered by US Treasuries and this could get even worse as as the Fed continue their path of raising interest rates later this year.

At the moment the view from the Reserve Bank of Australia is that they are likely to keep interest rates on hold for a long period of time and this is why the Australian Dollar has weakened recently heading in the direction of 1.80 recently.

With the Bank of England due to meet tomorrow afternoon I think the central bank will keep interest rates on hold once again with a 7-2 split but with the UK showing some very positive Retail Sales earlier this month I think we could see some signs that an interest rate hike could be coming sooner than the markets expects and if this is the case we could see the Pound make some further gains vs the Australian Dollar towards the end of the week.

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 weakness presents opportunity!

The Australian dollar has weakened against most other currencies presenting an improved opportunity to buy the currency. The main reason for this has been the shifts on the sentiment relating to the US and China, the Trade Wars. Another factor is the US raising interest rates which has seen the Aussie losing ground against its counterparts as investors seek higher returning and more reliable shores elsewhere.

The GBPAUD rate has risen to some of the better levels of the week as has USDAUD, the outlook on both pairs could easily support better opportunities to buy the Aussie. Investors will wish to seek out the very best levels they can for buying currency and we can help monitor the market for spikes and improvements as they happen.

Typically, the Australian dollar will lose value when there is uncertainty over what is happening globally and with Australia heavily reliant on trade with China to drive its economy, any signs that there is weakness or problems with China will see the Aussie weaker. Trump’s introduction of $50bn worth of tariffs this week will only serve to amplify this trend and this explains why GBPAUD reached near 1.78 this week.

The longer term forecast for the Australian dollar is strength as the RBA (Reserve Bank of Australia) seeks a higher interest rate itself. However with the Bank of England and certainly, the United States already raising and well ahead of the RBA, the outlook for the Aussie could be more weakness in the shorter term.

If you have a transaction buying or selling Australian dollars, getting as much information as possible on the rates is key to maximising your position. We are here to help with the planning and execution of any transactions at the very best rates of exchange so to learn more, please contact myself Jonathan Watson to learn more.

Thank you for reading and please email jmw@currencies.co.uk to learn more.

 

Weak data results in a drop for the Aussie Dollar, where to next for AUD exchange rates?

There’s been a loss for the Aussie Dollar across the board of major currency pairs today, with it’s losses against the Pound and the Japanese Yen being the biggest.

Employment figures down under for May were released this morning, and that caused the Aussie Dollar to drop as the figures released were worse than expected. The figures have got worse in recent months which is another reason for the sell-off of the Aussie Dollar.

Some disappointing data out of out of China recently has also weighed on the Aussie Dollars value, owing to the close trading relationship between the two nations. This isn’t an unusual pattern and those planning on making a currency exchange involving the Aussie Dollar should consider this in future.

The poor data out of China has caused China-linked commodity prices and also the Chinese stock market to fall, and this isn’t a great sign for the Aussie Dollar moving forward. Fears surrounding the trade tariff’s potentially put on China by the US are also weighing on AUD exchange rates.

There’s a speech planned by Reserve Bank of Australia assistant Governor Ellis tomorrow. Although no changes to monetary policy down under are expected this year its worth following his comments in case he alludes to future monetary policy changes or even the slowdown in the Australian economy recently.

If you would like to be notified in the event of a major market move for AUD exchange rates, do feel free to register your interest.

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.

 

Australian Dollar predicted to rise as global economy picks up

The Australian Dollar has been strengthening in recent weeks, with the GBP to AUD exchange rate being a good example of how much AUD has strengthened after the rate has dropped from around 1.85 to around 1.75 over the last few months.

A number of analysts have begun to adopt a hawkish outlook for the Aussie Dollar moving forward, and the HSBC chief economist for Australia and New Zealand is the most recent key figure to share this view. His name is Paul Bloxham and he’s cited the largest increase in 6 years for the counties GDP as a key indicator as to the health of the economy.

A global pick up will benefit the Aussie Dollar due to its export driven economy, but I also think its important that our readers are aware of the importance of the countries services sector as its now more important to Australia than its mining sector.

Next week on Thursday there will be a number of key releases out of Australia, mostly covering the health of the countries employment sector. If you would like to plan around this event do feel free to register your interest with me.

The economy is likely to remain resilient in the face of trade wars breaking out, due to its close trading relationship with China. One downside though is that the RBA doesn’t plan on hiking interest rates until next year, meaning that the currency may lose some of its competitive edge.

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.