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Why does the Australian dollar remain strong when iron ore prices continue to fall?

For regular readers they will be aware that Australia’s largest export Iron ore has a direct impact on Australian dollar exchange rates. If iron ore prices fall the trend is for the Australian dollar to fall and vice versa. However, iron ore prices have been falling recent however Australian dollar exchange rates remain resilient. There are two main reasons for this.

Another trend that has an impact on Australian dollar exchange rates is the performance of emerging markets. When emerging stock markets outpace that of developed the Australian dollar also performs well. In recent months emerging markets have been performing well and forecasters expect this trend to continue. In addition, interest rate forecasters tend to disagree with the RBA as they believe the RBA will hike interest rates throughout 2018.

Commentary from the Reserve Bank of Australia, I believe will continue to dictate exchange rates   therefore people with an upcoming Australian dollar exchange should continue to monitor developments.

Economic data releases that will impact Australian dollar exchange rates 

In the early hours of Tuesday morning the RBA are set to release their latest minutes. My personal opinion is that the Governor does not want to strengthen the Australian dollar any further and thats why he continues with the stance of interest rates won’t be raised anytime soon. It will be interesting to see if the minutes give any further insight.

Later in the week (Thursday) the latest unemployment numbers will be released. Over the last 3 years the Australian job market has gone from strength to strength and at present remains at a record low of 5.6%. The Governor of the RBA is wary that if the Australian dollar continues to strengthen the job market could be impacted however for the time being it looks like the unemployment numbers will remain at 5.6%.

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.

Will GBPAUD rise or fall in October?

The pound to Australian dollar rate is looking more and more fragile in recent weeks yet has remained in the higher 1.60’s and even over 1.70 since the beginning of September. With wage growth a concern and consumer confidence starting to slip there is a growing concern there will not be any interest rate hikes for some time down under. This has seen the Australian dollar weaker as investor debate the next move from the RBA, further weakness on the Australian dollar would not be too surprising at all.

Buying Australian dollars with pounds has become much less costly in the last month as the pound surged on an expectation the Bank of England might raise interest rates next month. Coupled with mounting concerns over the dates for any possible Australian interest rate hikes GBPAUD climbed to some of the best rates since June.

Despite the inherent uncertainty over Brexit the pound is much better supported on renewed belief the UK Government under Theresa May will deliver Brexit. With a transitional period being discussed to extend the time frame for when the UK legally leaves the EU, there is now scope for the pound to find more support.

Whilst uncertainty over Brexit and a renewed confidence in the Aussie could see us shift lower in the the mid 1.60’s or even lower, for now the outlook seems to favour GBPAUD in a range of 1.68-1.73, I see it finding supporting above 1.70 in the next few weeks.

If you have a transfer to make buying or selling Australian dollar making plans around these key events is vital to getting the best deals. If you wish to discuss your transfer in more detail please speak to me Jonathan Watson by emailing jmw@currencies.co.uk

Australian Dollar strengthens against the Pound after US Jobs Report (Tom Holian)

US unemployment data showed the best levels since 2001 and this had led to a strengthening of all commodity based currencies including the Australian Dollar.

After hitting as high as 1.71 just over a week ago the Pound has started to fall against the Australian Dollar which has now started its own fightback.

There have been rumours circulating that the Bank of England may be gearing up to increase interest rates at next month’s meeting but in my opinion this would be far too early.

UK inflation is currently at 2.9% so there is an argument for raising rates but with average earnings not keeping up at just 2.1% then an interest rate hike could cause real problems for UK economic growth.

I say this because if an interest rate hike does take place this will increase costs for mortgages and rent which in effect which reduce the consumer’s ability to spend which is a large part of the British economy.

Therefore, I expect going into next week that we’ll see further losses for the Pound against the Australian Dollar next week.

If you have a 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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as I can.

Bad news for the Pound pushes it lower, are trade levels in the early 1.60’s on the horizon again? (Joseph Wright)

Despite some negative data being released down under in the early hours this morning, the Pound has still dropped against AUD throughout the day’s trading.

The worst Retail Sales figures in 4 and a half years were published this morning, as it turns out that Australian consumers are beginning to cut back on items such as food, clothing and furniture.

The reading for July was also revised down from the previous reading, meaning that the two drops in sales figures are the biggest back to back drop since 2010.

Despite this this disappointing data release the Pound has still fallen against the Aussie Dollar, whereas the majority of other major currency pairs have risen against the Aussie.

Sentiment surrounding the Pound took a knock today as ratings agency, Standard & Poors questioned whether the UK could withstand an interest rate rise, and it emerged that car sales in the UK are continuing to drop.

There has also been a lot of talk regarding UK Prime Minister, Theresa May’s calamitous speech to the Conservative party conference on Wednesday.

Odd’s are increasing on her resignation and although I don’t expect any changes at number 10, I think any talk surrounding this matter could result in a weaker Pound which could push the GBP/AUD pair down towards the 1.60 mark.

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.

Further falls for the Australian dollar (Dayle Littlejohn)

Many economists globally are expecting the Australian dollar to come under further pressure for the rest of the year as the US begin to reverse the bad run seen over the last 6 months. It’s been widely publicized that the Federal Reserve are likely to raise interest rates in December. If this materializes the overpriced Australian dollar is likely to devalue as currency speculators move out of the risky commodity currency and into the safe haven US dollar for higher returns on their investments.

In regards to GBPAUD exchange rates the pound has been losing momentum against the Australian dollar over the last 5 trading days as yearly GDP numbers fell to 1.5% from 1.7%, mortgage approvals were down by 3,000, markit manufacturing fell from 56.9 to 55.9 and PMI construction fell from 51.1 to 48.1. However the Bank of England are suggesting an interest rate hike could occur as early as next month which could provide further opportunity for Austrian dollar buyers.

This evening Australia are set to release retail sales numbers, trade balance, including import and export numbers and RBA assistant Governor Debelle’s speech. For more information on how these data releases impacted the market feel free to drop me an email and I will respond tomorrow morning.

If you need to buy or sell Australian dollars and would like to save as much money as possible, feel free to email me with your requirements and I will respond with the process of using our company drl@currencies.co.uk. As a company we pride ourselves in the ability to get you a better exchange rate than your current currency provider or your bank. In addition we can outline your options and the potential future events, which will impact your exchange rate. This will help you to make informed and educated decisions.

 

 

Will GBPAUD continue to rise this month?

The pound made considerable gains against the Australian dollar throughout September due to the Bank of England’s stance surrounding future interest rates and the dovish stance from the Reserve Bank of Australia.

Governor of the Bank of England Mark Carney announced that an interest rate hike could occur as early as November and currency speculators have purchased the pound in anticipation.

Governor of the Reserve Bank of Australian Philip Lowe confirmed that an interest rate hike anytime soon is unlikely as they do not want to see household debt rise further.

In other news iron ore prices in Austrian have been taking a tumble in recent weeks. Iron ore is Australia’s largest export and when iron ore prices fall this tends to mean the Austrian dollar follows suit. If iron ore continues to decline I expect buying Austrian dollars will become cheaper in the upcoming weeks.

Another factor that will have a major impact on GBPAUD exchange rates is Brexit developments. Currently Brexit negotiations have stalled once again as UK and EU negotiations cannot come to an agreement in regard to the divorce settlement or EU citizens rights once the UK depart the EU. This could be a story that has a positive or negative impact on the pound.

If you are buying or selling Australian dollar 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 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! **

How will Australian interest rates impact the Aussie dollar?

Countries around the globe this year have been raising interest rates due to the global outlook improving. The Reserve Bank of Australia are one of the countries that have kept interest rates at record lows and many economists have predicted that a hike could occur sooner rather than later.

However Australian lender Westpac announced this week this think it is unlikely that interest rates will be raised until 2020 which could have major implication for Australian dollar exchange rates, if their predictions come true. Westpac’s theory is that it is unlikely that wages pressure will rise and consequently inflation will remain at current levels.

With most leading nations raising interest rates the Australian economy would be left behind and investment would continue to leave the Australian dollar which means buying currency would become more expensive.

However ANZ have a slightly different view and believe household debt is high, referring to the housing bubble in the major cities therefore they believe the Reserve Bank of Australia are likely to rise twice in 2018.

It just shows trying to predict Australian dollar exchange rates long term is very difficult however I believe the Governor will continue to monitor and if the Australian dollar exchange rates devalue further in the upcoming months the likelihood of an interest rate hike increases.

If you are buying or selling Australian dollar 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 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! **

A dramatic fall for the Australian dollar

Towards the end of last week the Australian dollar lost value against all of the major currencies due to RBA governor Philip Lowe announcing that it was unlikely the RBA would raise interest rates anytime soon.

Within my last article I suggested this would be the case, as the Governor in recent months has made it clear if the Australian dollar continues to strengthen in value, this could have a negative impact on GDP and the amount of jobs that are created.

The Australian dollar also took a tumble due to a further fall in the commodity iron ore. Iron ore is Australia’s largest goods export and over the last six trading sessions is down 13.7%. There is a direct correlation with iron ore and Australian dollar exchange rates. When iron falls exchange rates fall when iron rises exchange rates rise.

However the Australian dollar didn’t devalue much against sterling this week as Theresa May’s lack lustre speech in Florence Friday left the currency markets wanting more and therefore a sell off of sterling occurred. The PM gave no indication to how much the UK would pay the EU when the UK departs and this is what the market was anticipating.

It’s a quiet week for Australian economic data releases, the only release to look out for is Private sector credit Friday morning however this isn’t normally a big market mover. For people that are buying or selling Australian dollars this week should also analyse the other currency that you are converting.

If you are making a currency conversion in the upcoming weeks or months, I would recommend emailing me with the currency pair you are converting (AUDUSD, AUDEUR, AUDGBP) the reason for your transfer (business transaction, property purchase) and the timescales you are working to and I will respond to your email with my forecast and the process of using our company drl@currencies.co.uk.

Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.

Dayle Littlejohn

 

 

Will Theresa May strengthen the pound against the Australian dollar?

This Friday UK Prime Minister Theresa May is set to deliver a life after Brexit speech and economists are predicting a volatile day for sterling vs Australian dollar exchange rates. An EU official has stated that she has an important intervention to make however has made no further comment.

Rumours are suggesting that the Prime Minister may back track from comments made by her fellow peers within the Conservative party and actually state the UK will be paying the EU an amount of euros to depart. If this is the case I expect the pound to rally against the Australian dollar as the UK are one step closer to negotiating a trade deal with the bloc.

However if the rumours are not true and she exclaims that the UK and EU are struggling to come to an agreement then this could lead to a major sell off of sterling and the recent gains for Australian dollar buyers could diminish. Personally if I were buying Australian dollars if we see a shift above 1.70 I would seriously be tempted to take advantage before the pound finds itself under pressure again when Brexit negotiations begin towards the end of the 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.

** IF YOU ARE ALREADY USING A BROKERAGE TO BUY YOUR CURRENCY IT WILL TAKE TWO MINUTES TO EMAIL FOR A COMPARISON AND I AM CONFIDENT I WILL BEAT ANY PRICE YOU ARE CURRENTLY RECEIVING  **

Will the GBPAUD rise back to 1.70?

The pound has slipped below the 1.70 mark we briefly touched as investors initial excitement at the prospect of a UK interest rate hike begins to fade. The pound soared last week breaking the 1.70 mark but this was not sustainable, the Australian dollar has been much weaker too but we have seen it regain some strength back too. With almost 5 cents improvements from the worst rates in a very short space of time there are some very good arguments for buying Australian dollars with pounds at present, however there is more important news this week that could influence the rates.

A more optimistic tone from the Reserve Bank of Australia’s Minutes released this week also predicted two hikes in 2018 and talked of the recent highs in Iron Ore prices, all positive news that has helped the Aussie. This is all in contrast to last week when a board member Harper stated he felt that there was little the RBA could do and that the main driver on the AUD was movements on the US dollar.

Big news this week will be the US Federal Reserve Interest rate decision this evening. There is a very strong relationship between the US dollar and the Australian dollar, investors will essentially look to capitalise on the stronger interest rates in Australia but with the US also on a path to raising their own interest rates we could easily see big swings.

Governor Philip Lowe is also due to speak tomorrow and his comments will be watched closely for signs of how he views the possibility of raising interest rates. Friday we have a very important speech from Theresa May in Florence on Brexit which could really see the pound stronger if as expected she indicates a commitment to paying some form of Brexit bill.

GBPAUD is much improved and may well rise higher but it would be a shame for Aussie buyers to miss out on the current much higher rates. If you have a transfer to make and wish to get some extra information to help make a decision on an exchange please contact me Jonathan watson by emailing jmw@currencies.co.uk.