Tag Archives: reserve bank of australia

Weaker AUD beneficial for the Australian economy, where next?

The recent RBA, Reserve Bank of Australia Minutes showed us that the RBA view the recent weaker Australian dollar as good news for the economy in helping to support growth. Australia’s economy is heavily reliant on the sale of its raw materials globally, including to China, its major trading partner. The expectation here is that the RBA will not be in any rush to raise interest rates, they view the weaker currency as ‘good news’.

The big news for this week on the Australian dollar is Unemployment data released in the early hours of tomorrow, at 12.30 GMT. The figures are predicted to show the Unemployment rate holding steady but a lower participation rate and possibly a lower employment rate. This could see the Australian dollar weaker as it underscores the recent direction and sentiment that has weakened the currency.

This could mean the Australian dollar continues to drift lower and remain weak, particularly owing to other factors including the likelihood of Trade War issues continuing to weigh on China, its largest trading partners. Markets are concerned that the Chinese economy is struggling as a result of the trade disputes with the US and Donald Trump, this has seen some economic indicators in China reach concerning levels.

China is struggling with a slowing rate of growth and concerns over home sales, rising Inflation and also falling car sales. Other examples of anxiety include the amount of debt taken on by Chinese authorities in their pursuit of infrastructure to build their economy. All of this is painting a slightly worrying picture for the Chinese economy as the trade wars are likely to get worse and this will all put pressure on the Aussie dollar too.

If you have a transfer involving the Australian dollar into any other currency and wish for some expert insight into the trends and themes to move the market, why not get in touch with us. We are a firm of specialist FX brokers with many year’s experience in managing large volume international payments.

Thank you for reading and we hope to hear from you soon.

Jonathan Watson

jmw@currencies.co.uk

Selling falls against the Australian Dollar after chances of a No-Brexit deal increase

The Pound to Australian Dollar rate has fallen below the key 1.80 mark during today’s trading session. This is key as the GBP/AUD pair had previously consolidated above this level and traded as high as 1.85 before the recent fall which has taken place because of the Brexit related comments this week.

At the time of writing the EU leaders are all currently in Austria, as they have been for the past couple of days as there is an informal summit taking place. Whilst there have been some positive comments regarding Brexit recently the summit has all together been a negative for the Pound as the currency has fallen dramatically against a range of currency pairs, with the fall against AUD being quite dramatic in terms of recent price movement which has mostly been thin.

Much of the talk revolves around the Chequers deal, and whether or not it will be both the preferred approach of the UK government and also accepted by the EU members, which at the moment is looking unlikely especially after a speech by UK Prime Minister, Theresa May today.

There is a bank holiday down under on Monday of next week, as it’s the Queen’s birthday and there aren’t any major releases until next Friday which means I’m expecting the Pound to be the main driver of currency fluctuation between the GBP/AUD pair.

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.

What can we expect this week for GBPAUD exchange rates?

The week ahead for the Australian dollar looks set to be dominated by continuing news on the likelihood of future interest rate hikes down under. Last week saw a mixed bag of data as investors weighed up the conflicting signals and the overall outlook on the currency pairing. This was underscored by a very positive unemployment report which helped the Aussie to rise against its counterparts. Good news on the Australian dollar has however been tempered by the worrying prospect of fresh economic tariffs from Trump on China, Australia’s main trading partner.

The main economic news this week will be the RBA, Reserve Bank of Australia Meeting Minutes and also the House Price Index released this evening. Later in the week we will also see the the RBA Bulletin and also a speech by Assistant Governor Christopher Kent. It was a speech by RBA Assistant Governor Bullock last week which saw movement on the rates as he highlighted growing household debt.

Clients with a currency transfer involving the Australian dollar could now face a range of events to move the rates, it does appear the factors which have weakened the Aussie in recent weeks, are set to remain. Global concerns over Trade Wars which are set to negatively impact China will weigh on economic sentiment and this will influence the Australian dollar.

If you have a transfer to consider buying Australian dollars with pounds there is also the EU Summit which is coming up which could see a volatile week on GBPAUD exchanges. Brexit continues to be the main driver on the pound and this information could see some volatility on the pair.

If you have a transfer to make involving the Australian dollar, we are in business to offer assistance with the timing and the planning of any currency transfers. For more information at no obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

Jonathan

Will the Australian dollar rise or fall in September?

The Australian dollar is likely to come under increasing pressure in my opinion, as we approach a series of important domestic events in Australia and also some global issues which might driver its value. At home, concerns over the political outlook from a fractured government combine with concerns about the economy. Abroad the Trade Wars between Trump and China puts pressure on the Chinese economy, Australia’s biggest trading partner.

The Australian dollar has typically attracted investment from abroad owing to its high interest rates, a currency’s value can often be determined by the yield or return available to investors. Expectations for the Australian dollar are now lower with the US raising interest rates to a level now higher than Australia. Even the UK and Eurozone, both scarred by political and economic uncertainties in recent years, are on a path to raise interest rates.

This puts the Australian dollar on the back foot and means it cannot perform as well as it has done in recent years. Australian interest rates reached a peak of 4.75% but are now currently 1.75%. This has generally made the Australian dollar a less attractive currency to hold and I believe this will continue.

Some of the fundamental factors driving the currency markets are good indicators of future performance. The fundamentals on interest rates suggest that Australia will not be raising before either the UK, possibly the Eurozone and certainly not before the US. This will mean these currencies become more attractive to hold and might gain against the Aussie.

Political concerns in Australia have not diminished in Australia and these could see further weakness for the currency in the future. Wider global concerns could also be felt by the escalation of tensions from the Trade Wars in China, there is plenty to weaken the Aussie down the line.

If you have a transfer buying or selling Australian dollars then please do not hesitate to contact me Jonathan Watson to discuss further.

Jonathan Watson

jmw@currencies.co.uk

Political turmoil drives the Aussie!

The Australian dollar has really weakened this week as investors struggle to make sense of the uncertainty present in their current political situation. The current Prime Minister is now Scott Morrison, after the ousting of Malcolm Turnbull. Interestingly, the Australian has risen today as the news has settled the immediate uncertainty of a leadership contest.

The Australian dollar had been rising on the improved economic outlook for Australia, investors were backing the RBA, Reserve Bank of Australia to raise interest rates in the future but it really is likely to be longer term. In particular this uncertainty over the economic outlook could prove very damaging for interest rates as investors shy away from making any key decisions with the uncertainty present.

The big question now is whether Mr Morrison can hang on to the position or will he have to call an election to justify his position? Any signs of an election or the actual announcement of an election down under would see the Australian dollar much weaker, clients looking to buy or sell Australian dollars could find themselves in a volatile market if this happens.

The Australian dollar has also risen today on the expectations that there has been progress with Chinese trade talks which might have previously seen the Australian dollar weaker. Whilst the trade wars are bad news, the expectation that they will not massively deteriorate and see huge damage to the Australian economy might help the Australian dollar.

Finally, events concerning Donald Trump should also be a market mover on the Australian dollar, you never quite know what Donald Trump will do or say which can move rates! Lately, the weaker US dollar we have seen has helped the Australian dollar to rise. Further woes and concerns surrounding Donald Trump and his government could lead to a stronger Australian dollar.

For more information on the best rates and strategy to move money internationally at the best prices, please speak to me Jonathan Watson by emailing jmw@currencies.co.uk

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.