Tag Archives: reserve bank of australia

Dovish Reserve Bank of Australia Sinks AUD Rates Leaving Investors Unsettled

The outlook for the AUD was looking to the Reserve Bank of Australia (RBA) meeting which occurred yesterday. The current trend of the AUD looked as if the RBA would take a ‘dovish’ approach to their monetary policies. Investors had hoped that this would not be the case as the currency would lose momentum. As the minutes were released from the meeting yesterday this seemed to be exactly the case.

Sharp Retreat For Australian Dollar

The Reserve Bank of Australia’s minutes were released yesterday, which caused a sharp retreat of the AUD in the market. The meeting, which covered monetary policy, showed a bank that was still poised to cut interest rates despite current record lows. The key official cash rate was left at 0.75% but the minutes revealed that the possibility of another cut could not be ruled out.

Likelihood of a Further Interest Rate Grows

With the findings of the minutes from the RBA, it is more likely than ever that interest rates will be cut to a new record low before long. Policymakers in the meeting saw a clear case for the fourth rate cut of 2019, but have decided to wait and observe the effects of previous rate cuts before moving forward. The bank highlighted that only gradual progress has been made so far which gave reasoning to potential future cuts. The minutes also revealed that whilst members has judged that lower interest rates were supporting the economy, they also noted the possible negative impacts of lower interest rates on savers and for confidence in the AUD.

GBPAUD Interbank Exchange Rate Slumps Amidst RBA’s ‘Dovish Tilt’

Reports have suggested that the pound to Australian dollar exchange rate had slumped following the news of a ‘dovish’ RBA. The Aussie dollar edge up against the pound despite the proposed considerations of another rate cut. The trading rate was around AU$1.8953 yesterday. The GBP will be hoping for a boost following the YouGov poll, released after last night’s live head-to-head debate between Boris Johnson and Jeremy Corbyn. The pound continues to edge higher on hopes that a Tory majority will be achieved in December’s elections.

In regard to today’s outlook, the AUD could surrender some of yesterdays gains following the release of Westpac’s Leading Index. Should the index slump it could weigh on the AUD. Meanwhile for the GBP, if the polls suggest further support for the Conservatives it will likely give a further boost to the pound sterling.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you. teh@currencies.co.uk

GBPAUD Outlook Rates Break 1.90

To start the week the GBPAUD interbank exchange rate has rallied higher, with rates bursting through the 1.90 range for the pairing. The pound looks like it has started the week off on the front foot, making gains against all major currencies. This is despite the impending general election, which could be set to stir up some uncertainty. Meanwhile, Aussie employment data disappointed and sent the currency on a further downward spiral.

UK GBP Data Disappoints But Doesn’t Inflict Damage on the Driving Force

The UK’s Gross Domestic Product (GDP) data was recently released, the figures were lower than expected at 0.3% (with an expectation of 0.4%). The ongoing Brexit uncertainty has had a minute effect on the GBP exchange rates over the past few years. However, the weak data did not alter the course of the Pound Sterling to Australian Dollar exchange rate as the prospect of a Torie majority is currently the main driving force for the GBP. The current polls have placed Boris Johnson with a slight majority but volatility is expected and the outcome of the elections could swing either way.

Australian Employment Data Returns Poor Values, Adding Salt into the Wounds

An already struggling Australian dollar was hit with more bad news to start the week. The unemployment figures came back at 5.3%, rising from 5.2% previously. This negatively impacted the Australian economic outlook and disappointed the markets. The Reserve Bank of Australia (RBA) have previously cut interest rates three time this year and do not plan to make any more until at least 2020. Attention is turning to today’s (Tuesday) Reserve Bank of Australia (RBA) minutes which will likely offer some insight into the banks standpoint on future monetary policies.

AUD Waits for US-China Breakthrough for a Boost of Optimism, Whilst GBP Clings to Tory Majority

The struggling AUD is facing a slump as its traders await positive news from the US-China talks. The US appears firm on its mention of only agreeing to a deal that is positive for the US. This is likely to be what has caused a recent slow on the trade deal progress. Little information has broken from either camp and so investors are left twiddling their thumbs. Meanwhile, those investing in GBP will be hoping that recent news that a Tory majority is likely to be the outcome of December’s election, in a bid to keep the optimism behind the GBP rolling. The findings from the RBA’s minutes in today’s meeting will be telling of the future for the AUD and its monetary policy. There is a chance that they may take a ‘dovish’ turn to try to recover the falling currency.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

How the RBA rate decisions are likely to affect the AUD/GBP rate

The Reserve Bank of Australia (RBA) has been in talks in the last 24 hours to discuss the future of its rate cutting. Analysts are predicting that the RBA will refrain from any further cuts at least till the end of 2019. This may be a positive move as analysts suggest the market isn’t ready for another cut whilst others suggest that the RBA may have its hand forced into cutting rates later in the year or at the start of 2020.

Cause of previous rate cuts

The RBA has previously cut rates three times this year. This was to lift growth and inflation. Many experts predict that it will not be long before the RBA cuts the cash rate once more to a new record low of around 0.5%. The bank will most likely look toward achieving ‘full employment’ which should see rising wage packets, eventually leading to higher inflation. This puts an emphasis on the monthly job numbers in the coming months ahead.

The RBA’s outlook on rate cutting

The predicted outcome for the RBA is that it will likely be forced to cut its cash rate once more in the first half of 2020. In doing so, the Australian dollar will likely hit new lows, going toe-to-toe with the US dollar over the next six months. However, analysts have stated that another cut so soon could spell detriment to the AUD as the financial markets are not prepared for one so soon. Another cut so soon could negatively affect the AUD/GBP pairing, so this may be one of the reasons behind the RBA holding back on performing another cut right now.

Current state of AUD trading following the RBA meetings

On Tuesday, reports suggested that the AUD/USD and AUD/JPY interbank exchange rates were both down from their session highs, meaning the AUD is on the backfoot with these RBA meetings inbound. Analysts have also suggested that the AUD is looking likely to be volatile and show signs of exhaustion at higher levels as the US and China continue their back and forth about their trade deals.

On the other hand, should the US-China deal go well is likely that the AUD will continue to rise and fare well against sterling. Potential buying GBP with AUD may seek the news of the US-China trades before making any significant purchases as this may create opportunities should the deal come off positively.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

What Brexit means for the AUD to GBP forecast

In a time of seemingly endless uncertainty, the outcome of Brexit is one that will not only affect the UK but also every country linked with it. The Pound to Australian dollar outlook is likely to be affected massively by the direction Brexit takes.

Individuals looking to buy or sell AUD should be keeping a close eye on what comes out of Westminster surrounding the events of Brexit in the very near future.

Brexit uncertainties leave buyers and sellers hanging

With Boris Johnson unable to deliver on ensuring Brexit takes place on the 31st of October, another extension has been put in place giving the UK government up to 31st January to deliver on 2016’s referendum.

Add to this the fact that the UK Prime Minister has called a General Election for December, and subsequent votes in parliament have landed on a date of the 12th and the UK political landscape doesn’t look any more certain than it has for the past few years.
The uncertainty surrounding Brexit and the future of UK politics as a whole has experts suggesting that volatility is likely to be expected between the pound and Australian dollar respectively.

Talks surrounding Brexit have had both positive and negative influences on the Australian dollar, with positive talks between Boris Johnson and Leo Varadkar just a few weeks ago lifting the GBP/AUD rate.
However, as the Brexit momentum begins to slow, the highs experienced with the pound to Australian dollar exchange have eased off a little as the next steps in Brexit become less clear.

Risks of Brexit and the outlook for the GBP

The recent extension means the likelihood of a no deal Brexit is now reduced significantly, which is why the Labour Party Leader Jeremy Corbyn agreed to support the motion for another general election in December. This was good news for the pound, which, should a no deal Brexit be officially stopped, is likely to strengthen significantly. If a no deal Brexit does become a reality however then it is likely to help those looking to sell AUD to buy GBP.

Global trade wars and knock-on effects from Brexit may affect the rate of AUD

With countries like China reporting a plateau in their economic growth, the lowest forecasts in around 30 years, there is concern that a similar effect may be felt in countries around the world.

The Reserve Bank of Australia (RBA) may look to cut interest rates in a bid to keep up in the Trade Wars, but in doing so, these lower interest rates will more than likely equate to making the AUD weaker.
Investors on the Australian side are warned that they may need to contend with Trade Wars and the varying Australian interest rates at this time.

The outcome of Brexit is likely to affect the relationship of AUD/GBP. Volatility is likely to be expected in a time where the direction of Brexit is unclear. Buyers and sellers alike are advised to keep an eye on the news from Westminster as it unfolds.

For more Pound and AUD news or if you have a currency requirement you can get in touch with me, James Lovick, directly at jll@currencies.co.uk, or call +44 (0) 1494 360 899 to discuss these factors in more detail.

Reserve Bank of Australia update: Interest rate cuts expected

The pound to Australian dollar exchange rate has rallied higher today with rates for the GPB vs AUD sitting above 1.8250. There is a growing expectation that the Reserve Bank of Australia (RBA) may look to cut interest rates further at the meeting tomorrow morning. Some of the major banks including Westpac are predicting an interest rate cut which could be putting further pressure on the Australian dollar. Westpac has predicted rates for AUD/USD could hit a 10 year low as a result of further interest rate cuts. The RBA cut rates consecutively in June and July to try and add some stimulus to the economy to try and halt a slowdown down under. Unemployment in Australia recent climbed higher to 5.3% up from 4.9% the month prior which is causing alarm amongst policy makers at the central bank.

In the UK, Brexit remains the single biggest driver for sterling exchange rates. Expect a highly volatile week with the Conservative party conference in full swing despite a number of cyber-attacks making communications out of the conference difficult. Today is the second day of the conference and a speech from Chancellor Sajid Javid will be made this afternoon. Prime Minister Boris Johnson will be making his speech on Wednesday.

However with parliament now sitting after the Supreme Court ruled the proroguing of parliament to be unlawful the outlook as to whether there will be a deal or not is looking very cloudy and leaves an unclear picture for GBP to AUD exchange rates. Much of the Brexit debate focuses on a bill that was approved in parliament that requires the Prime Minister to request an extension for Brexit, something Boris Johnson strongly opposes. There have been reports that parliament will seek to introduce further legislation against the government to try and stop Boris Johnson from not committing to do this and he refuses to rule out a no deal Brexit.

It is worth mentioning that Nigel Farage announced over the weekend that he would stand for a seat in Westminster at the next general election which only highlights how tense the Brexit situation currently is.

Those with pending requirements to either buy or sell Australian dollars would be wise to consider their options with just one month to go before the Brexit deadline of 31st October. For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me James at jll@currencies.co.uk

Pound to Australian Dollar continues to trade just below 1.80, which factors could see the pair breach this level?

Earlier this morning GBP/AUD tested the 1.80 resistance level, with the pair hitting 1.7998 before easing off and at the time of writing the inter-bank level is 1.7940. The Pound to Australian Dollar rate has remained below the 1.80 handle ever since dropping below it at the beginning of July and based on the number of times we’ve seen the pair test 1.80 it could take some significant to see the pair return to trade levels in the 1.80’s.

AUD was dragged downward by the New Zealand Dollar earlier this week when the Reserve Bank of New Zealand surprisingly cut interest rates by a greater margin than market commentators had expected, resulting in a drop in the New Zealand Dollars value and this negatively impacted AUD also.

Later this week there will be a speech from Reserve Bank of Australia governor Lowe, and I think the markets will follow this closely in case he decides to follow the footsteps of the RBNZ and signal further cuts in future from Australia’s central bank. This could potentially result in a weakening of the Aussie Dollar which could then help the GBP/AUD rate move above 1.80 so those following he pair should be aware of the speech this Friday.

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.

Pound to Australian Dollar Forecast (Daniel Johnson)

Inflation & US/China trade war a concern for Australian Dollar Investors

The Pound has lost ground against the Australian Dollar of late which can be largely attributed to the lack of clarity surrounding Brexit.  Australia has had it’s own trouble however.  Inflation continues to be a problem down under and it is still some way behind the Reserve Bank of Australia’s  (RBA) 2-3% target. The RBA cut rates earlier in the year to 1% in an attempt to combat inflation and there is the possibility of further rate cuts during 2019. The next interest rate decision is due during the early hours of tomorrow and although rates are expected to remain unchanged the statement following the decision from the RBA could influence markets if it is again reiterated there is the possibility of further cuts later down the road.

The heavy reliance on China purchasing Australia’s exports is also causing problems for the Australian Dollar. As the US impose increased tariffs on China, China’s growth slows which in turn has a knock on effect to the Australian economy. Investors are choosing to move away from riskier commodity based currencies in favour of save haven currencies such as the Swiss Franc or US Dollar.

Increasing probability of a Brexit No Deal

Despite the problems in Australia, Sterling still could face further losses. Boris continues to threaten no deal and stated last week he would be ‘turbocharging’ preparations to leave the EU without a deal. Boris is using the threat of a no deal as ammunition to gain a more favourable deal on Brexit. Basically speaking however, the higher the probability of a no deal the weaker you would expect the Pound to become. Brussels stance remains unchanged again reiterating there will be no concessions to the current deal on the table. It is not in Brussels interest to let the UK leave with a decent deal, they do not want other members of the bloc to consider following suit.

The timeline is also a concern. The parliamentary recess concludes 3rd September leaving less than 8 weeks to get a deal in place, keep in mind Theresa May had two and a half years. According to Bet Fair there is a 57% chance of a general election, if you look at when previous elections have taken place the currency in question tends to considerably weaken.  The British 2010 general election serves as testament to this.

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 18yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are authorised 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

GBP/AUD rate remain under pressure as Bank of England cuts growth forecast

The Pound to Australian Dollar exchange rate remains close to the lowest levels seen in over 6-months as pressure continues to mount on the Pound across the board of major currency pairs. Since becoming Prime Minister Boris Johnson has ramped up the no-deal Brexit rhetoric and this has rattled the markets which has seen the Pound lose considerable value over the past month or so as his appointment as Prime Minister became a forgone conclusion.

Yesterday the Bank of England opted to hold interest rates where they currently are, but the highlight of the day was BoE governor Mark Carney’s warnings regarding the economic outlook for the UK economy now that a no-deal is looking increasingly likely.

The BoE now expects to see a 33% chance of a recession due to Brexit uncertainty, and earlier in the day the new government outlined plans to spend up to £2.1bn on no-deal Brexit preparations which demonstrates the intent of the new government.

The growth forecast for the UK this year has been cut to 1.3% from the previous 1.6% expectations, and much of the slowing economy is being put down to both uncertainty as well as a lack of foreign investment.

Moving forward we could also see the Aussie Dollar come under pressure, as this week US President Donald Trump has outlined plans for additional tariffs on China and trade talks between the two appear to have stalled once again which has seen a global stock market sell-off. A slowing of the Chinese economy would likely result in a weaker AUD 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.

Aussie Dollar boosted by better than expected Chinese data, could GBP/AUD test its annual lows anytime soon?

The Pound to Australian Dollar exchange rate continues to slide as pressure mounts on Sterling now that the talk of a no-deal Brexit is ramping up. Boris Johnson, the UK’s new Prime Minister has now been PM for just over a week and already during this time we’ve seen sentiment towards Sterling drop as fears of a shock to the economy later in the year and taking their toll on the currency.

GBP/AUD has some distance to fall yet before we begin seeing annual lows, but Sterling has been in the headlines over the past week as GBP/USD has hit a 28-month low and GBP/EUR has hit a 22-month so Sterling is finding itself int he news for the wrong reasons.

The lowest the GBP/AUD exchange rate has been in the past 52-weeks is 1.7210 and at the time of writing it’s currently 1.7635, so as you can see there a bit further for GBP/AUD to fall before it catches up with some of the other major currency pairs. The Australian Dollar has been boosted this morning as Chinese Manufacturing PMI rose to 49.7 in July which is a slight improvement on the June figure and also better than expected. Investors won’t get carried away though as the figure remains below the 50 expansion/contraction benchmark. Strong data released out of China is likely to have a positive effect on the Aussie Dollar due to the link between the two economies, so those of our readers following the AUD’s value should look out for Chinese data.

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 a slowdown in China result in a weaker Australian Dollar?

Our regular readers will be aware of the connecting between the Australian and Chinese economies, and in particular the importance of a strong Chinese economy and how this can benefit Australia along with the Australian currency.

In the early hours of this morning Chinese GDP figures were released by the National Bureau of Statistics and the data shows that in the second quarter of this year China’s economy grew at its slowest pace since 1992, which is growth at a rate of 6.2%. This figure was expected so we haven’t seen a sell-off in the value of the currencies tied to the Chinese economy which the Australian Dollar arguably is, but it could be a warning sign moving forward.

The trade war between Australia and the US appears to have taken its toll on the Chinese economy, and the efforts of the Chinese Central Bank don’t appear to have has d the intending effect which is why the economies growth is shrinking. Through 2018 the growth figure for the year was 6.6%, and I think that those of our clients and readers that are hoping for a stronger Aussie Dollar should continue to monitor the Chinese economies performance.

Although there will be no data releases out of the UK today, there will be a number of key releases this week such as Earnings Data tomorrow morning and a speech from Bank of England governor Mark Carney tomorrow amongst other releases throughout the week. Do feel free to register your interest with me if you wish to be updated in the event of a major market movement 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.