Tag Archives: sterling
GBP/AUD exchange rate hovering at pivotal point of 1.60 – Where will rates head next? (Daniel Wright)
GBP/AUD exchange rates have been loitering around the 1.60 mark for a number of days now and it appears that neither currency has the power to push through the current levels of resistance and make a break either way.
With Brexit and the triggering of article 50 clearly hanging over the head of the Pound the Australian Dollar has been on a very good run of form, seeing a huge boost last Wednesday when the Federal Reserve over in the U.S hiked interest rates but only gave the nod to a further two interest rate hikes this year as opposed to the expectation of seeing a further three.
Interest rate hikes in the U.S are generally seen as negative for the Australian Dollar as it makes the USD more attractive to investors. With the Australian Dollar and U.S Dollar a well known pairing that is used in carry trading, should either have news that makes it more attractive the other can suffer and you tend to see a large flow of money from one to the other very rapidly.
For those who are not aware, carry trading is a process where an investor borrows money in a currency with a very low interest rate (e.g USD) and shifts it to one with a much larger one (e.g AUD), making a difference on the two. When Australian economic data is poor or the U.S has some good news, you tend to see what is known as the ‘unwinding’ of carry trades, leading to the Australian Dollar weakening and the U.S Dollar gaining strength due to supply and demand.
Personally, I feel that the 1.60 rate will not be hanging around much longer and I would not be surprised to see a rise for the Pound, although be wary of Sterling getting the jitters in the next week or so as we close in on article 50 being triggered on 29th March, this is the official start of the process of the U.K leaving the EU.
For anyone with a large currency exchange to make, either involving buying or selling Australian Dollars it is imperative that you have a proactive and knowledgeable currency broker on your side throughout these turbulent times.
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The Pound has made some limited gains vs the Australian Dollar recently but ultimately is struggling to break much higher.
There are a number of different reasons as to why the Australian Dollar is performing so well against the Pound at the moment and I think we’ll see GBPAUD rates fall below 1.60 in the near future.
The Reserve Bank of Australia has made it clear that there will be no interest rate change for the time being and as interest rates are so high compared to any other leading economy we are continuing to see money invested in Australia.
Commodities have also been improving other the last year with the value of iron ore rising by over 50% in that same time. With iron ore such a huge part of the economy this has also kept the AUD strong against Sterling.
The Pound is also struggling against most major currencies and with next month due to see the triggering of Article 50 we could be in for further uncertainty ahead and a loss of confidence for Sterling.
Indeed, it is not yet clear whether the UK will opt for a hard or a soft Brexit and the lack of clarity is causing problems for the Pound.
The UK economy has actually been performing relatively well but recently we have seen two sets of data that should cause real concern. UK Average Earnings have started to fall and with inflation on the rise this means the UK consumer will ultimately have less money to spend and this was clearly demonstrated with the release of UK retail sales for January which saw the lowest level in three years.
On Wednesday we see the release of Chinese manufacturing data and Australia’s commodity index for February and if both come out well I think we’ll see the Pound fall against the Australian Dollar.
If you have a currency requirement coming up and would like more information or for a free quote when buying or selling Australian Dollars then do not hesitate to contact me directly and I look forward to hearing from you.
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Aussie Dollar remains strong despite positive news for the Pound, where to next for the GBP/AUD pair? (Joseph Wright)
Despite a boost to Sterling exchange rates yesterday afternoon the Aussie Dollar has continued to remain strong, bucking the trend which is a good indicator of Aussie Dollar strength right now.
The Pound rallied against most currencies yesterday after the Bank of England’s Kristin Forbes suggested that an interest rate hike in the UK should still be considered due to the reasonable levels of economic growth and the large amounts of ‘easy money’ available to the markets.
Additionally, there were comments from David Jones, a Brexit minister in the House of Commons that helped give the Pound a further boost yesterday afternoon. Jones announced that the House of Commons will be asked to approve the final Brexit deal before it’s put forward and this move leans towards a ‘softer Brexit’ which is why the pound gained value.
The reason for the Aussie Dollars resistance to a surging Pound is the hawkish Reserve Bank of Australia’s comments this week, whilst Chinese economic data has also impressed which is a good indicator for the Aussie Dollar strength in future due to the economies being closely linked.
In the current market conditions it can be comments made by key figures that move markets, and if you wish to be kept up to date with short term market movements feel free to get in touch.
If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well worth your time getting in contact with me on email@example.com in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
Iron ore has continued to go up for the fourth month in a row which is the longest period of increase since 2012 as demand from China continues to support the commodity market and therefore the Australian Dollar vs Sterling.
The price for the commodity is now the highest in two years but demand is cyclical and to me it is only a matter of time before Chinese demand starts to wane but the question is how long will we have to wait?
With Trump now in his second week as President of the United States he has upset many global leaders with some of his executive orders and with growth slowing in the US I think this will affect what is happening in China and therefore the Australian Dollar in the longer term.
In the meantime however whilst commodity prices remain resilient this could keep the Australian Dollar relatively strong vs Sterling for the time being.
The Pound is in my opinion still heavily undervalued against the Australian Dollar but whilst the uncertainty surrounding the topic of Brexit and Article 50 carries on then it will be difficult to see the Pound make any real significant gains even though UK economic data is going well at the moment.
Next on the agenda globally will be the US Federal interest rate decision due on Wednesday evening and typically whatever happens in the US has a knock on effect on the value of the Australian Dollar.
If you would like to take advantage of these current levels to exchange Australian Dollars and would like to save money on exchange rates compared to using your own bank then contact me directly for further information and a free quote and I look forward to hearing from you.
Having worked in the foreign exchange markets since 2003 I am confident that I can also help you with the timing of your transfer and make the whole process simple and stress free.
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Sterling Australian Dollar exchange rates due for a volatile day today? Supreme Court decision due out today! (Daniel Wright)
The long awaited Supreme Court hearing decision in the U.K is due out later this morning, which many expect to cause a fair amount of market volatility, not only for the Pound but for global markets as a whole.
Since this all started in December, the markets have been watching and waiting for any hint as to which way that the decision may go, as it will have a great impact on the Pound and where it heads next due to the influence it may have on a ‘hard’ or ‘soft’ brexit.
Should the Supreme Court overturn the high court decision and say that Theresa May and the Government are good to proceed with moving forward on article 50 (starting the process of brexit officially) then there is the chance that Sterling may drop off a little, but also to show another argument it may lead to Sterling strength as we will finally have a little certainty as to where the U.K heads with all of this.
The expectation is for the decision to confirm that they are upholding the High Courts initial decision and that May will have to put the decision through Parliament. If this is the case then more uncertainty may give the Pound a little drop off but what we hear afterwards could push it back up as I would be surprised if we do not hear a lot of the MP’s asking for a softer approach to brexit which may leave access to the single market.
All in all this could be a very busy day for Sterling/Australian Dollar exchange rates so you need to make sure you are watching the markets at all times, or that you take advantage of limit orders. If your current broker or bank has not made you aware of this handy tool then this is something that we offer. A limit order is where you can set a particular rate trigger in the market that you would like to achieve, and should it become available any time 24 hours a day 7 days a week then your rate will be bought out automatically for you. There is no cost to place this order and it can be cancelled or amended at anytime with a quick phone call to us.
If this seems of interest or you would like to make an enquiry about our award winning service and exchange rates anyway then it will be well worth you contact me personally. You can email me (Daniel Wright) on email@example.com with a description of your needs and I will call you personally to discuss the options available to you and to explain how it all works.
With limited Australian economic data last week and UK data exceeding expectation you would have thought the pound would have continued its good run against the Australian dollar. However this was not the case as GBPAUD started the week at 1.7175 and is now fluctuating in the 1.66s.
The reason for the decline is the looming Supreme Court ruling. The Supreme Court judges are back to work on the 11th January from their Christmas festivities and they should announce whether UK Prime Minister needs the approval of Parliament before triggering Article 50.
This announcement links directly to either a ‘Hard’ or ‘Soft’ Brexit. If Mrs May has to seek Parliament approval then a softer Brexit becomes more likely and therefore the pound could begin to start making gains against the Australian dollar. Where as if she overturns the High Court decision and she can invoke Article 50 by March then further losses for the pound vs the Australian dollar are on the horizon.
Personally I wouldn’t be surprised to see the judges stick together and therefore a softer Brexit becomes more likely. However 2016 was the year of surprises, therefore getting in touch early and being in the position ready to convert currency is the way forward.
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 firstname.lastname@example.org.
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