Tag Archives: sterling

Australian Dollar loses ground against most major currencies as trade war tension rises

Australian Dollar exchange rates have dropped away against all major currencies in treading today as tensions between the U.S and China rose once again over the weekend.

The Australian Dollar, Canadian Dollar and New Zealand Dollar topped the weakest major currencies of the day and much of this can be pinned down to the uncertainty surrounding the trade negotiations between Donald Trump and Xi Jinping.

As many regular readers will be aware any heightened tensions between the U.S and China can lead to weakness for the Australian Dollar, as the Australian economy can be susceptible to bad news from China.

 RBA meeting minutes tomorrow morning

We have seen a slight improvement in certain areas of the Australian economy recently, however most analysts do not believe that there has been enough to warrant a change in stance from the Reserve Bank of Australia regarding any interest rate changes. Interest rates have remained stable in Australia for a long time now and this is also another reason why the Australian Dollar has lost ground against a number of major currencies over the course of the year.

An higher interest rate will make a currency more attractive to investors as it means they are offered a greater level of return for their money, and with other central banks such as the Federal Reserve in the U.S raising rates on numerous occasions over the past year or so the Australian Dollar has been somewhat left behind.

Should the RBA take a more positive tone in their meeting minutes tomorrow then we may see a little strength back for the Australian Dollar, should their stance remain the same then focus will be back on any political news, such as the trade wars and for those that have an interest in the Australian Dollar against the pound then Brexit and Theresa May will be key.

Should you have the need to buy or sell a large volume of Australian Dollars in the near future and you would like my assistance then you are welcome to contact me (Daniel Wright) directly. You can email me on djw@currencies.co.uk with a brief description of what you are looking to do and I will be happy to contact you personally.

 

Australian unemployment figures due out tomorrow – Trade wars still key

Tomorrow we have the release of Australian unemployment figures and expectations are for the unemployment figures to have dropped off a little from 5% to 5.1% for October. This would be in stark contract to the latest release in New Zealand where the release came out at 3.9% recently, the best unemployment figures seen there since 2008.

Should the figure have risen a little as analysts are expecting then we may see a little weakness for the Australian Dollar in early trading on Wednesday, but in my own opinion I feel that political issues around the world are still the most important factor for the Australian Dollar against most major currencies.

First and foremost we have Donald Trump and his trade wars with China, one moment it looks like Trump is willing to compromise and broker a deal with his Chinese counterpart and then in the next breath he seems to go back into attack mode, aiming to lower tariffs for the U.S and to heap lots of them on China. With China being a major importer of Australian goods and services and a large volume of tourist dollars spent in Australia any move from Trump that is seen as negative for China tends to weaken the Australian Dollar and any positive vibes that come from the talks can give the Australian Dollar strength.

For anyone that has an interest in Sterling against the Australian Dollar, buying or selling then the next 36 hours are key. A Brexit deal appears to be edging ever closer however both sides are ‘cautiously optimistic’ which suggests that although a deal could be initially agreed by chief EU negotiator Michel Barnier’s latest deadline of tomorrow evening, if that does happen then GBP/AUD should surge through the 1.80 level however should talks fall through then we may be looking at trading closer to 1.76.

If you are in the position that you need to exchange Australian Dollars into or out of any major currency and you would appreciate my assistance then I would be more than happy to help you. Not only could I act as your eyes and ears on the market but we pride ourselves on getting the very top rates of exchange too. You can contact me (Daniel Wright) for a no obligation chat about your current position and I will get in touch with you personally. Feel free to email me on djw@currencies.co.uk or call the trading floor on 0044 1494 725 353 and ask to be put through to Daniel Wright, quoting Australian Dollar Forecast.

RBA interest rate decision tonight to impact Australian Dollar exchange rates – Positive Brexit news helps the Pound make gains against Australian Dollar

In terms of Australian Dollar news, all eyes will be on the RBA interest rate decision and monetary policy statement overnight tonight. One of the key factors that has led to Australian Dollar weakness over the past few months has been the fact that interest rates have remained static at a record low now for 26 months.

With other economies such as the U.S gradually raising interest rates we have seen a huge flow of money out of the Australian Dollar and into the U.S dollar as investors seek a better rate of return in what is perceived as a safer and more stable currency.

Historically a higher interest rate has strengthened a currency as it makes it more attractive to investors. It is now expected that due to the spiralling household debt and house prices in Sydney and Melbourne dropping off significantly in the past 12 months, an interest rate hike may only add pressure to the economy, so the RBA may remain reluctant to make any bold moves for the time being.

The rate is unlikely to change tonight but the rate statement will be key, as speculation on any future changes will move the markets accordingly.

We have seen a slight uplift in the value of the Pound against the Australian Dollar in the past week or so, this has been mainly down to apparent Brexit progress and the U.K seemingly edging closer to an initial deal with the EU.

As many regular readers will know the Australian Dollar exchange rate against the Pound is fairly susceptible to Brexit news, and the fact that things are looking up for the U.K negotiations team has led to strength for the Pound.

All in all this is an important time for the Australian Dollar, with trade wars between Trump and China seeming to progress, interest rates remaining static and for those looking to carry out an exchange involving GBP having Brexit to contend with too it really is vital that you have an experienced and proactive currency broker on your side.

If you would like my assistance then I have helped thousands of people buy or sell Australian Dollars for well over a decade and I will be happy to have a chat with you to see if I can assist you too.

Feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will be more than happy to have a no obligation chat to discuss a pending transaction with you. Not only should I be able to help you achieve a better rate of exchange than you are currently being offered but I would like to think our level of service is second to none too.

 

Downward trend for GBP/AUD continues, is a move towards 1.70 now a possibility?

The Pound to Aussie Dollar exchange rate has been weakening ever since hitting its highest level of the year back in April of this month. Back then the rate was 1.8450 and at the time of writing the rate has since dropped to levels 10-cents lower than this.

This price movement can be attributed to a number of reasons, with Brexit uncertainties perhaps at the top of the list. When the Pound was trading at its 2018 high vs the Aussie Dollar this was back when there appeared to be a clearer Brexit plan along with expectations of interest rate hikes. Since then although there has been a rate hike the Brexit plan has become unclear with infighting amongst the current government, a number of key resignations and also the probability of a ‘No Brexit Deal’ overtaking the chances of a deal being in place when Brexit begins next year.

AUD exchange rates have also benefited now that US – China trade talks have eased, as Australia is likely to be negatively affected if a trade war heats up and global trade slows. The close proximity to China is another reason for AUD sellers to be weary of this topic as China is also Australia’s biggest trading partner.

Moving forward Brexit is likely to be the biggest market mover for the pair, although there are economic data releases that can influence the rates. This week at 9.30am UK time there will be the release of Public Sector Net Borrowing cost for July. This figure will be out of the UK and an increasing figure on the previous one is likely to result in a downward movement for the Pound.

Also on Tuesday is the Reserve Bank of Australia’s Minutes report which could also result in market movement. There are no interest changes expected from the RBA until next year, but expect any allusions to result in market movement.

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.

 

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.

 

 

GBP/AUD could be set to fall further after UK inflation unexpectedly drops

Bets in favour of the Bank of England hiking interest rates in the UK this year slid yesterday, after the UK inflation data released showed a drop in the cost of living in the UK.

Markets weren’t expecting this, and the Pound’s trend appears to have reversed after losing almost 10-cents against the Australian Dollar over the last month or so.

The markets had expected to see an interest rate hike two-weeks ago today after the UK economy had been showing some positive signs, but the drop in economic growth (its fallen to a 5-year low according to the latest GDP figures) has put the brakes on these plans.

Some economists are now predicting that it may not be until November this year until the next hike happens and that will of course be determined by how the UK economy performs.

There haven’t been a lot of reasons for the Aussie Dollar strength and I think the recent price changes can be put down to the Pound’s weakness. There aren’t expected to be any rate hikes down under this year and the Australian economy has also demonstrated signs of a slowdown.

The current GBP/AUD level is trading at a 2-month low, and if you wish to be updated in the event of a spike in the price do feel free to 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 continues to trade in a volatile fashion, will the currency continue to decline?

The Australian Dollar saw a slight rise yesterday against many of the major currency pairs, although this strength is being put down to AUD benefiting from traders buying against the Euro.

AUD being one of the biggest benefactors of Euro weakness has come at a good time for AUD, as it’s been losing value recently at quite a dramatic rate. The fall in the value of the Aussie Dollar has been welcomed by the Reserve Bank of Australia as they were concerned when the currency was considered overvalued. With the Australian economy being heavily export driven a weaker currency is a benefit as it will attract more business.

Those hoping for a stronger Aussie Dollar should consider this, as the RBA is unlikely to implement any policies to limit the weakening of AUD.

Earlier this week it was announced that wage growth is lagging down under, and it’s also been confirmed by the RBA that a rate hike this year is unlikely.

This leads me to believe that the Aussie Dollar will continue to drop in value, and I wouldn’t be surprised to see the AUDUSD 2-year low tested now that we’ve seen a 1-year low breached.

When compared with the Pound the Aussie Dollar has staged a slight fightback after hitting an almost 2-year low, but I consider the longer term trend to be downward also despite the UK’s political uncertainty.

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 predicted to fall throughout 2018

Those of our regular readers hoping for a higher Aussie Dollar will be aware of how its upside is currently limited, and how the the US Dollar is partly behind the softening Australian Dollar.

The most simplistic way of looking at it, is that now the US Dollar is in many cases offering a higher rate of return than the Australian Dollar, investors are more likely to hold funds in that currency as opposed the the Aussie. Previously AUD offered one of the highest rates of return within the developed world and that resulted in a strong Aussie Dollar.

The issue now is AUD has a long way to fall if it’s to return to more familiar trade levels when we consider historical levels, which is perhaps why some predict to see it continue to fall. To put the US Dollars increased attractiveness into perspective, the US Dollar Index (which measures the US Dollars performance against a number of major currency pairs) has risen 3% since April the 16th. A clear indication of how investors are pooling funds into the currency.

The Reserve Bank of Australia on the other hand is adopting a different approach to the Fred Reserve Bank in the US. There are no interest rate changes from the RBA expected until next year, which is perhaps another reason that some economists are expecting to see the Aussie Dollar fall.

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.

Is the RBA’s monetary policy working, and how will this impact AUD exchange rates?

Australian interest rates have been set at 1.5% for around 20-months now. This is the longest period of time the rates have remained the same and interestingly, this is the lowest that interest rates have been in Australia.

Rates were dropped to this level back in August 2016 in order to stimulate the economy after it begun to show signs of a slowdown, and since then the RBA monthly meetings have been non-eventful. This is in stark contrast to back in 2008-2009 when the rates were changed on almost a monthly basis.

There are no changes expected for the next 6-months, which differs to the forecasts in the UK for example where the Bank of England is expected to hike rates at least once this year, with some forecasters predicting up to 4 over the next 18-months or so. The Fed Reserve in the US is pushing forward with the most aggressive monetary policy changes within the developed world, and this has negatively impacted the value of the Aussie Dollar as people are beginning to pool funds in the USD now that they can get a better return than when they hold funds in AUD.

Due to the Aussie economy not picking up much steam despite the low rates, and the RBA’s tentative approach to raising rates due to fears over an overheating house market, I think that we may see the AUD continue to lose value as the year progresses.

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.

How high could GBPAUD rates go?

The pound to Australian dollar exchange rates has been touching fresh highs as the pound rises and the Australian dollar weakens. A key factor in this trend has been the shift on the US dollar and the UK with interest rate hikes since both the UK and US are looking to raise interest rates whilst the Australian dollar has been weaker because there are no hikes planned.

This trend seems likely to continue in the weeks ahead as we learn more around the Bank of England who appear very keen to hike interest rates in the future. This will be data dependent but the path ahead is looking clearer which will only help the pound further in the future. The same too is definitely true of the US dollar and the US Federal Reserve who are likely to raise rates up to three more times this year.

As the US interest rate is higher now than the Australian interest rate it makes less sense to hold Australian dollars than US dollars. This has seen a big shift in USDAUD exchange rates which is weighing the Aussie dollar down against the pound and presenting much better opportunities to buy AUD with sterling.

The next really key news is this Thursday with the latest UK GDP (Gross Domestic Product) data which could influence GBPAUD rates. I don’t think this will be a majorly important release but next week could see increased volatility with the latest Australian interest rate decision and important US Non-Farm Payroll data released.

I would not be surprised to GBPAUD pushing higher and we could easily hit 1.90 or the high and mid 1.80’s in April. If you are selling Australian dollars to buy pounds moving sooner than later seems the best bet. Otherwise targetting a more beneficial rate on any spikes might prove a profitable and worthy approach.

If you have any transfer buying or selling Australian dollars then understanding the latest news and trends can help you to maximise your rate by trading at the right time. For more information please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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