Tag Archives: reserve bank of australia

What factors could push the Pound to Aussie Dollar rate above 1.80 this year? (Joseph Wright)

The Pound to Aussie Dollar rate has been hovering just below the 1.80 mark for some time now, and although the GBP/AUD pair appear to have consolidated between 1.75 and 1.80 the pair are yet to properly test the 1.80 threshold.

AUD has been boosted in the early hours of this morning after the Reserve Bank of Australia’s minutes from their latest interest rate decision were announced. The RBA remains positive focusing on wage growth and a pick-up in the global economy moving forward which could lead to a rate hike from the RBA later in the year.

The topic of a rate hike in Australia is likely to be key moving forward as a number of other major economies have begun hiking rates now. AUD had previously benefited from having some of the highest interest rates available in the developed world but as other currencies now offer similar returns AUD has lost its appeal somewhat, and this issue is what could give the Pound a chance of gaining on AUD pushing the GBP/AUD above 1.80.

JP Morgan recently offered their opinion on the Aussie Dollars prospects and suggested the currency could fall as weaker commodity prices and monetary policy divergence put pressure on the AUD’s value.

There is an important data release out this morning from the UK in the form of Average Earnings data. This is key because the figure has disappointed recently and struggled to keep up with inflation levels which had previously made the BoE hesitant to hike interest rates. Should wages have increased over the past 3-months the chances of a rate hike are improved so I would expect to see a jump in the Pound’s value should this be the case.

Planning around events such as these can prove beneficial, so do feel to get in touch to discuss any upcoming transfers you plan on making.

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.

Factors effecting AUD (Daniel Johnson)

GBP/AUD – UK Retail Sales hurt Sterling

The Australian Dollar has strengthened against the Pound of late due to retail sales data coming in lower than expectations on Friday.
The Office for National Statistics (ONS) reveals the data for both year on year and month on month changes. Retail sales volume was up 1.6% year on year in January, an increase from the previous period 1.5%, but still well below the expected 2.5%.
The monthly growth rate for the quantity bought increased by 0.1% with declines across all main sectors except non-food stores. The results were buoyed by small rise in the purchase of sporting equipment due to the January gym rush this helped offset a fall food sales.
The results were taken as negative and Sterling has suffered as a result.
Richard Lim, Chief Executive of the research consultancy Retail Economics stated the following:
‘Following a wave of profit warning and job cut announcements, these figures confirm a terrible start to the year for retailers. Indeed the worst January since 2013’.

Interest Rate Forecast from the RBA

Philip Lowe, Governor of the Reserve Bank of Australia spoke on Friday and stated that a rate hike would be dependent on inflation rising and further falls in unemployment. He did however say that in regards to a change in monetary policy the RBA would ‘move interest rates up, rather than down’. Inflation is s ac concern down under but Lowe said a strengthening global economy would help put inflation back on the agenda. These statements did cause the Aussie to strengthen against the majority of major currencies. Personally I would be surprised to see a rate hike this year.

Iron Ore Crucial to the value of AUD

Iron Ore is Australia’s biggest export, predominantly to the Chinese. Fluctuations in the price of Iron Ore has a result on the Aussie. Metal Bulletin’s Iron Ore index climbed to the Highest level since January 2011 which bodes well for the Australian Dollar.
I am of the opinion the Pound is chronically undervalued at present. Brexit uncertainty is currently anchoring Sterling and will do until we have clarity on a Brexit deal.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take a couple of minuites and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

 

RBA Interest Rate Forecast vital to AUD value (Daniel Johnson)

NAB predict Rate Hike as early as August

The National Australia Bank (NAB) has a very optimistic forecast in regards to rate hikes by the Reserve Bank of Australia (RBA). They are a minority. They are of the opinion we could see an interest rate hike by 0.25 basus points as early as August.

“The RBA has indicated that it is in no rush to raise rates in lock-step with global central bank counterparts. However, lower unemployment, and evidence of wages growth moving upwards — even gradually — should be enough to give the RBA confidence that inflation will eventually lift above the bottom of the band,” said Alan Oster, NAB Chief Economist.

“We continue to forecast two 25 basis point rate hikes in August and November, although acknowledge the risks are that these hikes could be delayed.”
Oster attached a couple of warnings which could change the RBA’s decision, noting that a slowing in household credit and house prices due to macro-prudential measures implemented by APRA “may help alleviate some concerns about household debt”.He continued “higher AUD may also threaten this outlook although our revised forecasts are for the currency to be 75 US cents by year end”.

Personally I do not share his view. I think a hike by August is very optimistic and economic data is not consistent enough to warrant a hike . Inflation is some way from where it needs to be and there is no reason to suggest there will be a rapid rise between now and August. This a viewpoint shared by the man that counts. RBA Governor, Philip Lowe who recently stated the following.

“further progress in reducing unemployment and having inflation return to the midpoint of the target range”, adding that it was “likely that the next move in interest rates in Australia will be up, not down”.

He also said “while we do expect steady progress, that progress is likely to be only gradual.

The general consensus is there will not be a rate hike until at least early 2019.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take a couple of minuites and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.

If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

Will the Pound to Aussie Dollar rate recover back to pre-Brexit levels anytime soon? (Joseph Wright)

There has been a 1 and a half cent difference between the high and low for GBP/AUD today, as the pair appear to be continuing to decide which direction to move in next.

Sterling has performed in a mixed fashion against the majority of major currency pairs today and I think the economic data released this morning is perhaps one of the reasons for this.

This morning the office for national statistics (ONS) reported that annualised UK Inflation figures for January showed 3%, justifying the Bank of England’s concerns regarding the rising rates of inflation. This was above the expectation of 2.9% and and considerably above the BoE’s 2% inflationary target figure.

The potential for another rate hike from the BoE is now more realistic, and with wage growth now beginning to show signs of an improvement I think there is a chance of it happening this year which is why the pound has been climbing.

GBP/AUD is currently just under 1.80, and if the pair breach this key level I can imagine seeing the rate break through into the 1.80’s even if it’s proving a stubborn barrier up until this point. A move towards 2.00 would be back to pre-Brexit levels, and should AUD continue to weaken I think seeing GBP/AUD closer to this mark sometime throughout 2018 isn’t something to be ruled out.

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.

Interest Rates in the UK and Australia to set the tone for GBPAUD exchange rates – Could we see GBPAUD rates move towards 1.80? (Tom Holian)

According to the Reserve Bank of Australia interest rates down under may be kept on hold for quite some time. In their most recent statement earlier this week the central bank has suggested that any change will be ‘gradual.’

The latest set of growth forecasts from the RBA will be announced on Friday and although unemployment is looking very strong in Australia there are concerns being raised that Retail Sales are struggling.

Indeed, the RBA governor Philip Lowe has said that ‘household incomes are growing slowly and debt levels are high’, which leads me to think the RBA will keep monetary policy the same until we see more positive news.

The last time we saw an interest rate hike in Australia was back in 2010 and rates have remained on hold down under now for a year and a half so don’t expect any rate changes to be coming anytime soon.

The problem for the economy in Australia is that over the years it has benefited from a higher yield in interest rates for global investors than many other developed economies.

However, with the US having increased interest rates three times during 2017 and on course to increase interest rates again in March this is leading investors to move their money away from commodity based currencies including the Australian Dollar and into the US Dollar.

Overall this is fairly good news for anyone looking to send money to Australia as it means GBPAUD exchange rates have remained positive recently and although we have seen the odd drop in rates, generally speaking the direction has been positive in Sterling’s favour.

Looking ahead to tomorrow the Bank of England are set to meet to announce their latest monetary policy decision and although no change is expected any hints of a rate hike coming further down the line to control inflation could see the Pound go in an upwards direction.

If you have a need buy or sell Australian Dollars in the near future then feel free 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 compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.

Sterling remains strong despite poor data release (Joseph Wright)

The Pound has managed to hold its ground against the Aussie Dollar today, despite some disappointing data being released earlier today.

It’s emerged that the UK construction sector is relatively flat at the moment, and this is similar to the UK manufacturing sector which also saw disappointing data released recently.

Despite this, the Pound is managing to hold onto its recent gains where the currency has moved up into the later 1.70’s after spending much of last year below 1.70. This suggests to me that the Pound has consolidated at its current levels and I think that there is more of a chance of seeing the pair hit 1.80 than 1.70 recently.

I think the Pound has also been helped by Aussie Dollar weakness which has restricted AUD from regaining any ground. An interesting estimate released recently is that there are forecasts of a 20% decline in iron ore prices throughout 2018, and this comes after the commodity lost quite alot of value recently already.

The reason this is significant is because iron ore is one of Australia’s biggest exports, so therefore a drop in the commodities value is likely to result in a drop in export income for the country.

Those watching this pair should also consider that if there is more talk of a rate hike from the Bank of England in May, we could see Sterling climb even higher.

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 GBPAUD hit 1.80?

GBPAUD rates have retraced the steps higher taken last week when we briefly hit the 1.77 mark. GBPAUD is now back trapped between the 1.73 and 1.74 range we have occupied for much of 2018. Whilst this pairing could break higher on the better news for the Brexit I do feel there is more chance of the levels testing 1.70 and even potentially being driven back into the 1.60’s.

The most important direct news on the Australian dollar is next week’s interest rate decision which could see the RBA (Reserve Bank of Australia) dropping hints as to when they may next raise interest rates. With tremendous uncertainty over the future direction on monetary policy, there is lots of scope for movement.

The overall expectation for the pound remains that sterling is very much susceptible to future weakness as concerns build over the final outcome from the Brexit plans. As an example, we are about half-way through the Article 50 process ending 29th March 2019, and there are still many vital issues to sort out.

The pound has struggled every time there has been fresh concern over Brexit and it is very difficult to see the next stages progressing without concern. Generally speaking, any deadline for Brexit talks has been missed with late night and last minute meetings usually delivering a final ‘fudged’ and in complete agreement.

The outlook for GBPAUD to rise much higher seems limited to me, I would not be banking on big improvements but the next week will be key. If you have a transfer to make buying or selling the pound and Australian dollar in either direction, perhaps we could offer you some useful information to help maximise your transfer?

For more information on our rates and service, all at no cost or obligation, please contact me Jonathan Watson by emailing jmw@currencies.co.uk.

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

 

Will the Australian dollar weaken further?

The Australian dollar has been gently weakening since August when the market learnt that the RBA (Reserve Bank Australia) might not be looking to raise interest rates as quickly as many had assumed. With some concerns in the Australian economy, many had questioned whether or not the RBA would be able to do this and the currency weakened.

2018 could easily see similar concerns raised and the currency struggling, I would be most concerned about the property market in Sydney where house prices have risen dramatically and caused many to be priced out of the market. House prices have risen for a long time but the latest data for Sydney showed a small decline which has seen the Australian dollar weaker.

If house prices are falling under their own accord then there is less need to raise interest rates in the future, most clients looking to buy or sell Australian dollars will be subject to this development. The Brexit will of course also be a big factor in this situation, if you have a currency transaction to undertake I would suggest making plans in advance to reduce the uncertainty connected to this situation.

2018 has plenty of events which could trigger unexpected volatility on the currency markets, there are a series of data releases coming soon which could greatly influence the rates. Often currency movements will be short and sharp, you might not even realise you have missed out on an opportunity.

We are here to help with the planning and timing of any currency exchange you will need. As well as offer a proactive service to help you make the most of movements on the currency markets we can undercut the kinds of rates offered by other sources. I have had plenty of clients contact me who are currently using Transferwise or OFX and been able to show them a saving.

For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

Pound to Aussie Dollar rate jumps on smooth Brexit hopes, will this trend continue? (Joseph Wright)

The Pound has spiked in value this afternoon across the board of major currency pairs, after this time the Brexit related news is positive.

Many may have expected to see the Brexit talks begin to have less of an impact on the Pounds day to day value, but it appears to be heating up as UK and EU officials prepare for Brexit trade negotiations and time to invoke Article 50 runs out.

The good news for the Pound today can be attributed to reports of the Netherlands and Spain is apparently open to a softer Brexit deal for Britain, which is of course welcome news to those hoping for a stronger Pound.

Those following the Pound should be aware that it’s trading at an 18-month high against the US Dollar.

Moving forward the Pound to Aussie Dollar rate is likely to continue to be driven by sentiment surrounding the Brexit and how the UK economy will perform during and after the transition.

If you would like to be kept updated regarding any short term price changes between the pair discussed today, do feel free to get in touch and 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 predictions

Over the last 4 weeks the Australian dollar has been making gains against sterling which is fantastic news for any client that is holding onto Australian dollars and purchasing sterling. A month ago GBPAUD reached the late 1.70s off the back of the positive news that trade negotiations can begin between the UK and EU.

However in recent weeks the Reserve Bank of Australia have announced that an interest rate hike could actually occur sooner rather than later which is a big surprise as it was only a month ago the RBA warned that an interest rate hike was unlikely to occur throughout 2018.

Many of the leading banks throughout Australia are mixed to whether a hike is likely and therefore the future trends for the Australian dollar exchange rates. For example Commonwealth Bank and UBS are optimistic however Morgan Stanley and Westpac are talking it down. Personally I believe the RBA wont want to be left to far behind the US and they may follow to suit when the US hike, therefore I would keep an eye on US interest rate decisions.

Commodity prices will also be the key driver this year for the Australian dollar which is no surprise. Again Commonwealth Bank and UBS are optimistic that Iron Ore will continue to increase where as Morgan Stanley and Westpac believe a major slowdown is on the horizon for China, which will therefore mean demand for iron ore will drop, consequently having a detrimental impact on the Australian economy and dollar. Its very difficult to predict however with growth forecasts for China suggesting a slowdown is on the horizon, I tend to lead towards Morgan Stanley and Westpac’s predictions.

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.