Tag Archives: sterling

Will the RBA cut interest rates next week? (Tom Holian)

The Australian Dollar has come under a little bit of pressure recently against the Pound as inflation results for the Australian economy came in overnight at 1% compared to the expectation of 1.3%.

Inflation has been struggling down under recently and with prices not rising this is likely to impact the health of the economy going forward. The target for Australia is between 2%-3% and this is only the third time since 1996 that the target has not been met.

Usually falling inflation results in a central bank looking to cut interest rates and this could happen when the Reserve Bank of Australia meets next week on 2nd August.

With interest rates at historically low levels in Australia any further interest rate cuts could cause the AUD to weaken which is good news for anyone looking to buy Australian Dollars with Sterling.

However, also next week the Bank of England meeting takes place on 4th August and there is a wide expectation that the BoE may look at cutting rates themselves or even increasing the volume of Quantitative Easing, both of which could be detrimental to the strength of Sterling.

If you’re concerned about what may happen to GBPAUD exchange rates over the next few weeks it may be worth considering buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

I look forward to hearing from you.

 

 

Will Sterling improve against the Australian Dollar? (Tom Holian)

Sterling exchange rates have started to fightback against all major currencies including the Australian Dollar as Theresa May will be replacing current Prime Minister David Cameron on Wednesday.

Theresa May was initially expecting a 9 week leadership campaign but Andrea Leadsom chose to withdraw which gave May a clear run.

Politically this has been taken well as it allows a bit of certainty to return to the markets and with May such a seasoned politician she is probably more likely to have the gravitas needed to settle things down.

Down under Malcolm Turnbull has been given another term and typically this would have helped to strengthen the Australian Dollar further against Sterling but the Pound has recovered owing to the change in leadership in the UK.

Indeed, the Pound has suffered huge losses since the Brexit vote by as much as 30 cents against the Australian Dollar and could Theresa May coming in be the catalyst for a recovery in Sterling exchange rates?

Later this week however the Pound is likely to come under further pressure when the Bank of England meets to discuss monetary policy. Governor of the central bank Mark Carney was a huge supporter of remaining in the European Union and he has suggested since that the UK could look at cutting interest rates or Quantitative Easing in the near future.

Personally, I think it would be too early to look at change monetary policy just yet so if there is no change we could see Sterling make gains vs the Australian Dollar. Arguably it will be the minutes published immediately after the announcement that are likely to cause volatility for GBPAUD exchange rates.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

I look forward to hearing from you.

 

 

Sterling spikes after May is announced as new PM, more good news to follow? (Joseph Wright)

Sterling exchange rates spiked upward across the board just after lunchtime today as Andrea Leadsom, who was Theresa May’s biggest rival for both the role of Prime Minister and as the new leader of the Conservative Party here in the UK, stepped down allowing Theresa May to accept the positions.

Mrs May announced that she was “honoured and humbled” to be the new PM-in-waiting and markets received the news well. The Pound moved upwards across the board due to what I believe is more political certainty, something markets almost always receive well, and also the fact that May was a ‘remainer’ in the lead-up to the EU Referendum may instill some confidence in investors, as although many were happy to see the ‘Brexit’, currency markets didn’t with the Pound plummeting in the immediate aftermath of the vote. The term ‘Soft Brexit’ is doing the rounds on financial media which would explain my thinking on this matter.

Later this week on Thursday the Monetary Policy committee will be outlining monetary policy moving forward, and many are expecting an interest rate cut down from 0.5% to 0.25%.

Should this occur, and some economists have the figure down for a 74% chance of a rate cut which is up from 11% before the Referendum result, then I think we can expect to see the Pound fall further and wipe away today’s gains for example.

At the same time, if there isn’t an interest rate hike this could bode well for the Pound and may suggest that the economy hasn’t been hit as badly as many have envisioned, which could boost the rate of exchange for GBP/AUD.

Those with an upcoming currency requirement involving the Pound and Aussie Dollar may wish to get in contact with me (Joe) regarding strategies and how best to time the trade. Our specialist currency exchange brokerage doesn’t offer financial advice but we do assist our clients with the timing of their trades based on price targets and historical data such as annual and daily highs and lows.

If you would like to discuss your currency exchange with me, and would like to consider taking advantage of award winning exchange rates from one of the UK’s leading regulated currency brokerages, feel free to email me directly ideally with a telephone number on jxw@currencies.co.uk with an outline of your requirement. You can also call me directly on 01494 787 478, just ask one of the reception team for Joe.

Sterling falling against all major currencies including the Australian Dollar (Tom Holian)

Sterling has continued to fall against the Australian Dollar and we have already seen a big fall this morning for Pound Sterling exchange rates.

Since the Brexit Sterling has fallen by over 10% against the Australian Dollar and today Bank of England governor Mark Carney will announce his most recent Financial Stability report.

I expect the focus to be on potential risks to the UK economy caused by the uncertainty of the EU referendum and any mention of a potential interest rate cut or further Quantitative Easing could cause problems for the Pound.

UK construction data came in at its lowest level in 7 years during June compared to the month before with a figure of 46 compared to 51.2 in May. Anything below 50 shows contraction and such a low figure has caused a big lack of confidence in Sterling.

The Reserve Bank of Australia kept interest rates on hold at 1.75% last night which was expected owing to the uncertainty of what is happening politically in Australia at the moment.

With the Australians experiencing a hung parliament at the moment according to legislation they have now 13 days before they have to form a new government.

Typically when this sort of issues occurs this will often weaken the currency involved but at the moment the currency markets are focusing on Sterling’s weakness caused by the Brexit fallout rather than specific economic data.

Australia is one of the few nations that has maintained its AAA credit rating and this could be at risk if the country does not settle itself politically but generally speaking I think things will sort themselves out during the next fortnight.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

I look forward to hearing from you.

 

 

Sterling continues it’s decline vs the Aussie Dollar, despite political uncertainty down under (Joseph Wright)

Since the initial fall in Sterling exchange rates after the shock of the ‘Brexit’ vote, the Pound has remained relatively flat against most major currency pairs although that pattern has differed when we compare the Pound with the Aussie Dollar.

The support levels within GBP/AUD’s trading range have been under pressure and the pair are now trading at 1.75/1.76 whereas 1.80 has previously acted as a support level.

To me this demonstrates further weakness in the Pound moving forward when compared with the Aussie Dollar, and even if the current trading pattern is where GBP/AUD are trading once the dust has settled from the ‘Brexit’ vote which shocked global markets, I think the support level will consistently be tested in a similar manner to what we’ve experienced since June the 27th when the votes outcome was announced.

Political uncertainty is what’s been driving GBP exchange rates down for most of the year, especially since the ‘Brexit’. Australia is facing it’s own set of political uncertainties as we speak as over the weekend the Australian elections were held. The result so far has unexpectedly resulted in neither major party having a clear majority which could weigh on Aussie exchange rates although the currency is yet to show any worrying signs, particularly against the Pound.

We’ll see how this unfolds and how GBP/AUD is affected but as it stands I expect the ‘Brexit’ talk to continue to drive exchange rates between the pair for the meanwhile, although anyone with an upcoming currency exchange to make involving the Aussie Dollar should certainly keep an eye on the outcome of the election.

Those with an upcoming currency requirement involving both the Pound and Aussie Dollar may wish to get in contact regarding strategies and how best to time the trade, or trades should you be open to the approach of a staggered entry. Our specialist currency exchange brokerage doesn’t offer financial advice but we do assist our clients with the timing of their trades based on price targets and historical data such as annual and daily highs and lows.

If you would like to discuss your currency exchange with me, and would like to consider taking advantage of award winning exchange rates from one of the UK’s leading regulated currency brokerages, feel free to email me directly ideally with a telephone number on jxw@currencies.co.uk with an outline of your requirement. You can also call me directly on 01494 787 478, just ask one of the reception team for Joe.

Sterling rallies against the Australian Dollar as Brexit looks less likely (Tom Holian)

Sterling vs the Australian Dollar has risen dramatically over the last few days as the most recent opinion poll published by YouGov has shown that the Remain camp are leading with 44% of the vote compared to the Leave camp with 43% with the rest currently undecided.

Clearly the vote is too close to call but this change in sentiment has helped to strengthen the Pound against all major currencies including the Australian Dollar.

The Reserve Bank of Australia announced their latest set of minutes last night and there was no sign of an interest rate cut coming which has put a stop to Sterling’s rise against the Australian Dollar.

However, the main driver of exchange rates is down to the sentiment surrounding the EU referendum due to be held on Thursday with the votes due to be published on Friday morning.

I think if we see a Remain vote winning then I would expect Sterling to break past 2 against the Australian Dollar so if you’re looking to sell Australian Dollars into Sterling it may be worth trying to organise this prior to the result at the end of this week.

However, ultimately the vote is democratic and will be decided by the public so until the result is announced we could see big swings on the currency markets between Sterling and Australian Dollars so it is important that you’re in contact with your currency broker.

I have personally worked in the industry since 2003 and I expect to see more volatility on exchange rates compared to the Scottish referendum and various general elections during this time.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk 

I look forward to hearing from you.

 

 

GBPAUD now comfortably trading above 2.00, further AUD weakness looks likely (Joseph Wright)

The current upward trend for GBP/AUD is yet to show any signs of slowing down, as once again today Sterling has far gained on the Aussie with the high of the trading day so far at 2.0388.

Sterling sellers are currently in a far better position now than just a few weeks ago as Sterling’s upward bounce has been significant and brought on due to a number of different factors.

The principle driver of GBP exchange rates presently is the predicted outcome of the EU Referendum next month. The relationship between the majority of GBP exchange rates and the predicted EU outcome is very straightforward, the less likely a ‘Brexit’ the stronger Sterling becomes and vice-versa.

The reason Sterling’s gains against the Aussie have been so magnified is become at the same time prominent UK bookies and pollsters are suggesting the ‘Remain’ campaign has gained a strong lead, members of the Reserve Bank of Australia have become increasing dovish regarding the economic outlook for Australia, whilst at the same time they’ve cut the Interest Rate down from 2.00% to 1.75% and hinted at further cuts in future, which has softened the Aussie’s value in general and particularly when compared with a surging Pound.

It’s worth noting that last night RBA Governor Glenn Stevens made it clear that the door is open for further monetary loosening in future, and his speech saw AUD exchange rates drop across the board.

Moving forward, I’m expecting Sterling’s gains to subside but I can see the pair leveling out and trading within the current range for some time. I think GBP/AUD 2.00 will act as a support and I don’t expect the pair to fall below 2.00 this month or next unless there’s a big swing in the ‘Brexit’ polls.

If you would like to discuss an upcoming currency exchange you plan to make involving Sterling and Aussie Dollars, feel free to contact me regarding my forecast. You can also take advantage of the high levels of security and award winning exchange rates offered by the specialist foreign exchange brokerage where I work, just email me (Joseph) on jxw@currencies.co.uk or call me directly on 01494 787 478.

RBA governor to set the tone for the Australian Dollar vs Sterling (Tom Holian)

Sterling vs Australian Dollar exchange rates have remained above 2 apart from a small blip overnight.

The Reserve Bank of Australia governor Glenn Stevens will take centre stage when he addresses the markets about the recent policy decision made by the central bank.

The RBA cut interest rates earlier this month from 2% to 1.75% in an attempt to kick start the Australian economy which has seen signs of a slowdown recently.

The Chinese economy which is such an important part of the Australian economy has continued its recent slowdown and with commodity prices still relatively low this is causing problems for the economy down-under.

I think Glenn Stevens’ tone will be relatively dovish and he could even hint that the RBA may look to cut interest rates again in the future and this could see GBPAUD rates go in an upwards direction overnight.

The sticking point behind whether or not Sterling may strengthen further will come on Thursday when UK GDP figures are set for the release.

This is the second revision for the first quarter with the estimate at 0.4%. Anything different is likely to cause some volatility for Sterling vs the Australian Dollar.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

 

 

The beginning of a rebound for GBPAUD exchange rates? (Joseph Wright)

GBPAUD exchange rates have remained range bound throughout this week, and they’ve been trading within this range (between 1.83 to 1.86) since April the 13th.

There would appear to be some support for Sterling around the 1.83/1.84 mark, and I think that those waiting for the right time to sell their Aussie Dollars should pay close attention to that particular level, as it may present the best opportunity to make that conversion.

I’m of this opinion for a number of reasons, firstly as we’ve previously covered here on the blog, Reserve Bank of Australia (RBA) Governor Glenn Stevens has previously highlighted the downsides to an overvalued currency to a recovering economy, and I think that there is a chance the RBA could take action in order to weaken AUD some time in future. Additionally the fears surrounding Britain’s political future moving forward are beginning to subside, at least that’s what the currency markets are suggesting as GBP has recovered a lot of lost ground on many of the major currency pairs this week.

When we look at the chart for GBPAUD this year the weakening of the Pound looks like it’s begun to slow down since the middle of March, this would suggest Sterling is finding some strength around these current levels, and personally I becoming a bit more bullish with regards to GBP moving forward and I wouldn’t be surprised to see GBPAUD levels closer to 1.90 than 1.80 around the beginning of next month.

Sterling exchange rates have been dragged downwards this year mostly due to the upcoming EU Referendum on the 23rd of June, and as both the UK Government puts in overtime to sway the public into voting to remain in the EU, and the most recent polls are suggesting that the ‘remain’ camp is leading, Sterling exchange rates are beginning to show strength at a time when many haven’t expected it.

There’s no financial data to be released tomorrow that applies specifically to GBP or AUD, so I expect sentiment to continue to drive the GBPAUD exchange rate for the rest of the week. If you have an upcoming currency requirement involving GBP, AUD or both, it’s worth your time either calling me directly on 01494 725353 and asking for Joseph Wright, or alternatively you can email me directly on jxw@currencies.co.uk for my forecast, and taking advantage of award winning exchange rates from a regulated UK based currency brokerage.  

 

Australian Dollar continues to strengthen against Sterling even after Chinese GDP figures (Tom Holian)

Sterling vs Australian Dollar exchange rates have continued to fall during the course of the week even after the Chinese GDP figures showed a fall to 6.7%.

As China is Australia’s largest trading partner any slowdown in the world’s second largest economy often tends to weaken the Australian Dollar however the data has caused little movement on the GBPAUD rate.

This highlights the problems that Sterling is facing across the board and with just over 2 months to go before the UK holds the EU referendum on whether to stay or leave the European Union this is causing a huge loss in confidence for Sterling exchange rates.

The Bank of England has also recently warned that the EU vote is likely to harm future growth and BoE governor Mark Carney has stated that the possibility of Britain leaving the EU was the ‘biggest domestic risk to financial stability.’

On Tuesday the Reserve Bank of Australia meet to announce their latest set of minutes and any hints of a potential rate cut could see the AUD weaken but for the time being whilst the UK economy is dominated by the uncertainty of a potential Brexit this could see Sterling slip even further against the Australian Dollar providing some very good opportunities to sell AUD into Sterling.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk