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To what extent will Turkish sentiments drive GBPAUD this week?

The Australian dollar has been weakening as investor sentiments are frayed following the Turkish concerns which have been rattling financial markets. Essentially riskier assets are being sold off in favour of safer haven investments like the US dollar and Japanese Yen. The Turkish currency is being sold off and the funds are finding their way into the US dollar, creating big swings on other currencies like the Aussie.

GBPAUD has risen almost 1% today as investors also sell the Australian dollar because they feel it could also be at the mercy of the same sentiments which have driven the Turkish lira lower. For many years the cheap flow of money from the US in the form of QE (Quantiative Easing) had found itself invested  globally in emerging markets which offered higher returns.

With the market becoming spooked at the potential of further sell-offs, we could easily see a further deterioration in the Australian dollar which would see it become more expensive to buy. The outlook is not all rosy for AUD buyers with sterling however, as the rising US dollar is weighing the pound down too.

GBPAUD could be in for a very volatile period as the market struggles to price in the uncertainty up ahead. The market is eagerly looking for some kind of solution to the crisis which could easily spread to other investments and currencies. The problems in Turkey are not just effecting Turkey, many European banks have huge exposure to Turkish investments.

There is also important data due for the UK with Unemployment Tuesday, Inflation on Wednesday and Retail Sales Thursday. On the Australian side we have Unemployment data released Thursday, all in all a busy week ahead for GBPAUD.

I foresee a levels in the mid-1.70’s following a testing of the 1.73 level last week. In the absence of a new negative news I see sterling finding some support, the Turkish pressures should also ensure the Australian dollar is not appreciating too much.

For more information on the best rates and strategy to maximise your deal, please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

Australian dollar rises slightly on RBA decision and a more positive outlook!

The Australian dollar has strengthened slightly on a more positive backing from the RBA, Reserve Bank of Australia. By not being too dovish or soft in their outlook, the Australian dollar has risen. The market is loosely expecting an interest rate hike in the future but this could now be as far ahead as 2020! Some had expected the RBA to be more negative last night, however they were quite positive about the Australian economy.

This has seen the Aussie dollar rise against all currencies, notably the pound and even the US dollar. GBPAUD has been driven into the 1.74’s whilst AUDUSD has risen to 0.7430. Expectations for the Australian dollar centre around the progress of their economy, Governor Lowe will give a speech later this week which could see further news to move the Australian dollar.

Last night’s interest rate decision moved the market as it was more positive than many had expected. It is now believed that in the future the global trade wars which have been raised as a concern which might negatively impact the Australian dollar, may not been such bad news. Tracking the data from China and the commentary from the RBA shows that perhaps this issue will not be as detrimental for the Australian dollar as believed.

Whilst stating they were not overly concerned at the moment from the slowdown in China, this was highlighted as a potential issue for the future and this could well be something that weakens the Australian dollar in the future.

If you need to buy or sell Australian dollars getting the best information is key to being able to track the upcoming news which might move the markets. For more information on the latest trends and themes which will influence the value of your exchange, please speak to me Jonathan by emailing jmw@currencies.co.uk

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.

Australian dollar volatile under Trade War and Chinese economic data releases…

The Australian dollar will take its cues early next week from a series of economic data released in China, notably Chinese GDP (Gross Domestic Product) data released very early in the morning on Monday. News from China is very important on the Australian economy and there is no bigger release than GDP since it shows how well the respective economy is performing.

This news is all the more important given the current Trade Wars between China and the US, we are currently facing renewed prospects of increased tariffs which would in most eyes only serve to have a negative effect on the Chinese economy. Surprisingly, against this backdrop we have seen a series of economists for Reuters predict the Chinese economy will actually grow at a slightly faster pace this year.

This is because whilst the Chinese economy could be negatively impacted by the Trade Wars, the momentum in their economy and also the moves by the PBOC (People Bank of China), the Chinese central bank, to stimulate the economy, will all help to stimulate growth in Asian dragon. This will all help to see the Australian stronger if it happens and it will make an interest rate hike down under all the more likely.

Later next week the release of Australian Unemployment data will also prove very interesting for Australian dollar exchange rates, clients looking to buy or sell might find themselves with fresh information to move the rates. Of particular interest would be whether the Unemployment level is likely to have increased to 5.6% versus the previous levels of 5.5%. This would make it less likely we will see the RBA (Reserve Bank Australia) putting themselves on a path to hiking in the future.

The week could start strongly for the Australian dollar if the economic data from China is supportive of the Australian economy, however, it might weaken towards the end of the week if the news is less positive. Into the mix we have to put Donald Trump and the Trade Wars, with his comments at Nato and also in the UK upsetting many, his upcoming visit to Putin next could see some volatility on exchange rates as the market tries to gauge what happens next.

If you are considering any purchase or sale of Australian dollars, next week could be very important as a series of data and news threatens volatility on the currency. To discuss strategy relating to any positions, please don’t hesitate to get in touch with me directly on jmw@currencies.co.uk.

UK GDP gives the pound a boost vs Australian dollar

This morning at 9.30am UK Gross Domestic Product numbers were revised to 0.2% from 0.1% for quarter 1 which has given the pound a boost against the Australian dollar. The Bank of England in recent weeks have been hinting that an interest hike could occur as early as August and the improvement in GDP certainly helps the cause. For Australian dollar buyers rates have improved by 0.5%.

Another reason why the pound has been making progressive gains against the Australian dollar is that the Aussie has been weakening due to the trade war between the US and China. The US is Australia’s most important defence ally and China the most important trade partner, therefore Australia are stuck between a rock and a hard place. The theory behind it is that further tensions will put further pressure on the Australian dollar and therefore I would expect GBPAUD to break through 1.80.

In other news the EU summit is now over, and the message from the EU is that the UK need to make progression fast. UK Prime Minister Theresa May has called a meeting at her Cheques country side retreat,  and the full cabinet will attend. The rumour on the market is that Theresa May could announce a soft approach which will be outlined in her white paper which should be released early July. I expect this may give the pound a small boost.

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.

 

 

Bank of England to influence GBPAUD exchange rates (Dayle Littlejohn)

Today the Bank of England are set to release their latest interest rate decision and this event has the potential to have an impact on GBPAUD exchange rates. At the beginning of the year the Bank of England were hinting that an interest rate hike was imminent and due to a poor run of UK economic data interest rates were kept on hold and the pound lost value against the Australian dollar.

Today looks like we will receive similar commentary as the latest Q2 growth figures were a mixed bag, wage growth construction output and industrial production all missed the consensus. Arguable the only recent economic data release that exceeded expectation were the retail sales numbers.

My personal opinion is that the vote will be split 7-2 in favour of keeping interest rates on hold, which will be a slight non event. However Governor Mark Carney will talk down the chances of a rate hike in the foreseeable future due to the recent flurry of economic data, Brexit negotiations and trade wars. Arguably there is a good chance that buying Australian dollars with pounds could come more expensive throughout the day.

If you are buying or selling Australian dollars in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company drl@currencies.co.uk. If I haven’t covered your currency pair please outline the pair you are converting. 

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Important news to move Australian dollar exchange rates!

The Australian dollar has been a stronger contender on exchange rates lately as investors back the Australian dollar to potentially improve in the future. This is all owing to the improved expectations we have of late that the Chinese economy will improve further and the global economy is not as badly affected by the Trade Wars.

The Trade Wars and potential future trading activity of the global economy is a big driver on Australian dollar exchange rates, if you are looking for improvements for buying or selling the Australian dollar, keeping abreast of the latest developments is key to maximising your overall position. Australian unemployment data next week could be a big driver as attitudes to the economy and the labour market are vital to shifts in the likelihood of the RBA (Reserve Bank Australia) to raise interest rates in the future.

If you have a transfer to make in the future then understanding the market and all of your options in advance is highly recommended to help minimise the inherent uncertainty of just where levels could potentially go. On GBPAUD exchange rates we could easily see the rate rise to 1.80 if better UK news and worse information on the Aussie comes into play.

Next week is also crucial as we have the latest US interest rate decision where the market is anticipating further information from the US Federal Reserve on interest rate expectations. This could see the US dollar rise which would weaken the Aussie, their relationship is quite closely linked since both now have similar interest rates but investors might prefer to hold the US dollar as it is seen as a more stable and reliable currency.

If you have a transfer to consider in the future, understanding the market and all of your options in advance is key, for more information at no cost or obligation please contact me Jonathan Watson jmw@currencies.co.uk

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

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.

 

Wage growth puts further pressure on the RBA

This week Australia have released the latest quarterly wage growth numbers and Australian dollar sellers have been left disappointing. The consensus was for wages to have grown by 0.6%, however in fact wages had grown by 0.5% for the quarter. The poor wage growth numbers are keeping inflation beneath the Reserve Bank of Australia’s target which is directly having an impact on Australian dollar exchagne rates.

If wage growth numbers continue to dwindle along and inflation remains below the RBA target, policy makers will have no choice but to leave interest rates on hold at record lows and this is what many leading forecasters are predicting, which is no surprise. Speculators move their assets chasing higher returns of interest and with the US marching ahead and potentially looking to raise interest rate another couple of times this year investment is going to leave Australian shores and land in the US.

In regards to GBPAUD exchange rates the pound has been performing worse than the Australian dollar as exchange rates have dropped below 1.80. UK economic data has disappointing which has stopped the Bank of England from raising interest rates and the Brexit negotiations continue to weigh on the pounds value. Today UK Prime Minister Theresa May confirmed that the UK will release a whitepaper before the June summit which will outline the UK’s full position.

When the whitepaper is released this could have a clear indication about the future path of the UK and therefore GBPAUD exchange rates. If you are converting GBPAUD within the next 3 months this event should be monitored closely. 

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 the currency pair you are converting, 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.

What can we expect from the Australian dollar ahead?

The Australian dollar has been stronger as heightened concerns the US may not raise interest rates as quickly as expected triggered a rise in the value of the AUD. Investors have been buying up the US dollar in anticipation of a higher interest rate which would make the currency more attractive to hold, however, with the Australian dollar holding attraction with its higher interest rate, it remains strong.

The next big news for the Australian dollar will be next week with the latest RBA (Reserve Bank of Australia) meeting minutes which will give us the latest news from the RBA’s meeting last week. The expectation is for the RBA to be possibly looking to raise interest rates longer term, some commentators believe this could be as soon as the end of the year but personally, I do not expect anything too soon.

Investors are bracing themselves for the longer-term raise from the RBA which has helped to fuel the recent strength of the Australian dollar, overall impressions are for the currency to avoid some of the more familiar problems where it has dramatically weakened. A key driver of this volatility had been the move from the latest decision so, the next meeting will be crucial to get an idea of where Australian dollar will be headed next.

If you have a transfer buying or selling Australian dollars we can help with the planning and management of any deals with a view to securing the latest information and news when required. For more information please feel free to contatc me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for getting in touch and I look forward to hearing from you and assisting in the future.