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Anthony from Moneycorp

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About Anthony from Moneycorp

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  1. Anthony from Moneycorp

    GBP and AUD update

    The pound to Australian dollar exchange rate has come under added pressure following new Brexit developments, which are once again starting to impact on sterling exchange rates. Rates for GBP vs AUD had rallied higher since last Friday when US President Donald Trump delivered on his promise to impose additional tariffs on Chinese good coming into the US. The uncertainty has continued after China then imposed 60 billion worth of tariffs on US exports escalating the trade war further. Overnight has seen the rift widen after China has reportedly said that they may not continue with these trade negotiations unless the US shows “sincerity”. Any developments in this spat are likely to see a reaction for the pound to Australian dollar exchange rate. The Australian dollar also faces a further slide lower as the Reserve Bank of Australia (RBA) considers cutting interest rates. New Zealand have already cut interest rates this month signalling the mood in this part of the world for the commodity currencies. Concerns in the Australian economy and the recent weak retail sales data continue to point the RBA in the direction of cutting interest rates putting added pressure on the Australian dollar. In the UK the Brexit debate is heating up ahead of European elections to be held 23rd May. Major volatility for sterling exchange rates is expected around this time with many voters expected to leave the two main parties for the Liberal Democrats, Change UK and the newly formed Brexit Party. If there is a major shift towards the Brexit Party under Nigel Farage then this may be seen as a reaffirmation of the Leave vote and could help shape the direction of Brexit with a potentially cleaner Brexit to become possible, something that would be seen as negative for the sterling exchange rates. It should not be underestimated how much of a political stir these elections could cause which could see high currency volatility. The fourth and final vote on the existing withdrawal agreement will be held in the first week of June. This event will likely see major volatility for GBP to AUD rates. The Prime Minister is expected to lose this vote and her departure from office is to be expected shortly after this date with Conservative MPs already preparing for a quick leadership contest. A change of leader will almost certainly have a bearing on the direction of Brexit and hence the strength of the pound.
  2. Anthony from Moneycorp

    GBP and AUD Update

    The Pound Australian Dollar (GBP/AUD) exchange rate is on the back foot this morning as AUD investors were relieved by the Reserve Bank of Australia’s (RBA) decision to keep rates on hold this month. At the time of writing the GBP/AUD exchange rate is down around 0.4% this month, leaving the pairing trading at around AU$1.8658. The Australian Dollar (AUD) strengthened during the Asian session on Tuesday, rising against the Pound (GBP) and the majority of its other peers in the wake of the RBA’s latest rate decision. Ahead of the meeting markets had priced in a roughly 50% chance that the bank could cut rates this month, leading the ‘Aussie’ to tick higher as AUD investors unravelled their positions after the RBA voted to leave interest rates on hold again in May. However, whilst the RBA may have kept rates on hold this month, the bank made it clear that a potential rate cut remains on the table this year, especially as slack in the labour market remains a concern.
  3. Anthony from Moneycorp

    Update on AUD and GBP

    The Australian Dollar (AUD) traded at a one - week low against the Pound on Thursday, after the 'Aussie' was driven lower overnight following the Federal Reserve rate decision. While no policy changes were made by the Fed this month, Fed Chair Jerome Powell reaffirmed the bank’s commitment to its ‘patient’ approach to monetary policy this year. This prompted a sharp drop in risk-sentiment in the mid-week as it gave no indication that the Fed could be planning to cut interest rates in the immediate future, despite recent speculation. Meanwhile the Pound (GBP) is clinging to its recent gains against the Australian (AUD) this morning following the publication of the UK’s construction PMI. While GBP investors welcomed the return to growth, with the sector only barely avoiding contraction and signs that activity could contract again in the coming months the PMI figures were ultimately unable to lend much support to the Pound.
  4. Anthony from Moneycorp

    Update on AUD and GBP

    GBP/AUD UPDATE: The Pound to Australian Dollar extended gains to post a fresh one-night best in overnight trade with Sterling reaching AU$1.86613 following a downbeat Aussie Building Approvals release. According to the Australian Bureau of Statistics, the number of new building approvals issued over the last month declined by 15.5%, the sharpest contraction since February 2018. The Pound-to-Aussie trimmed gains marginally heading into Friday's session amid reports both the UK's main political parties, the Conservatives and Labour, look set to lose a significant number of seats in English local elections - suggestive of malcontent over Brexit choas. The session ahead is relatively sparse with the notable exception of the latest UK Services PMI, forecast to rebound into growth territory following a dip below the neutral 50 level in last month's print. Focus, as-ever, will also be on UK politics with final election results and any ad-hoc Brexit news-flow while for the Aussie, with the RBA set to review policy next week, upside may be capped by expectations of further dovish rhetoric or even a potential cut to key policy rates amid persistently underwhelming data.
  5. Anthony from Moneycorp

    GBP and AUD Update

    The Pound-to-Australian Dollar exchange rate starts the new week trading at 1.8348 having climbed over a percent during the week before. Gains came mainly as a result of a weakening of the Australian unit after lower-than-expected inflation data suggested the Reserve Bank of Australia (RBA) might actually lower interest rates over coming months. Lower interest rates tend to weigh on the local currency as they detract from foreign capital inflows which favour jurisdictions with higher interest rates where their money will earn a higher interest return. The main release for the Australian Dollar is probably Chinese data in the shape of manufacturing PMI out Tuesday at 2:00 B.S.T. The PMI data for April will show whether Australia's largest trading partner has indeed turned a corner from its recent soft patch. PMIs for March suggested this is indeed the case, the data is considered to be on of the drivers of the recent pick-up in global investor sentiment over recent weeks: conditions that would typically favour the Aussie currency.
  6. Anthony from Moneycorp

    GBP and AUD Update

    Pound to Australian dollar rates have been trending lower as the market becomes more concerned over the outcome on Brexit and there has also been rising belief of progress on the trade wars, which have acted as a major drain for the global economy and sentiments generally. Clients looking to make a purchase of Australian dollars with pounds could find they become unstuck if there is a sudden change in the political situation for the UK. There has been many rumours that we could soon find Theresa May on the ropes once again, having to defend her position as Prime Minister. UK local elections are just around the corner, with the votes on May 2nd and this will be a big factor in determining the public mood with the Conservatives. There has been a growing expectation that there will need to be some change of approach in order to see Brexit make passage. Concerns over what type of Brexit is on offer could easily see the pound losing ground quite quickly. This week the focus will be on lots of talks with Labour which are unlikely to yield too much progress with the Labour party spotting an opportunity to make some further headway themselves, by frustrating Mrs May and her party.
  7. Anthony from Moneycorp

    GBP and AUD Update

    The Australian Dollar (AUD) was turbo - charged overnight on Tuesday with the currency racing higher against the Pound (GBP) and the majority of its other peers following the release of some stronger - than - expected economic data from China. According to China’s National Bureau of Statistic, Chinese GDP held at 6.4% through the first quarter of 2019. While this left growth at a decade low it beat expectations that growth would have slowed to 6.3% prompting suggestions that China’s recent slowdown may have bottomed out. This was also accompanied by some impressive Chinese industrial statistics, with year-on-year growth in industrial production reported to have rocketed up from 5.3% to 8.5%, blowing past forecasts of a modest rise to 5.9%. The accompanying industrial data may have been even more supportive of the rise in risk sentiment according to some analysts. Looking ahead, the Pound Australian Dollar (GBP/AUD) exchange rate may come under additional pressure on Thursday as the UK publishes its latest retail sales figures. Sterling looks likely to stumble following the data as economists forecast that sales growth will have slumped in March, falling from 0.4% to -0.3% as consumers limited their purchases amid heighted Brexit uncertainty. In the meantime the release of Australia’s employment figures overnight could elicit some weakness in the Australian Dollar.
  8. Anthony from Moneycorp

    GBP and AUD Update

    The pound to Australian dollar exchange rate has made some small gains to start this week after a poorer performance from the GBP to AUD pair last week. The general move lower in the last couple of weeks has been influenced by a weaker pound due to continued Brexit uncertainty but also a stronger Australian dollar as commodity prices have spiked higher. In the UK, Brexit remains the single biggest driver for sterling exchange rates although news on this front it likely to be less in these coming weeks with Parliament taking the Easter recess. The UK is now preparing to contest the European elections following the agreed extension for Britain’s withdrawal from the EU until 31st October 2019. The markets are now preparing for the implications from this extension in that the Conservative party could lose a great deal of seats in the EU elections. With the newly formed Brexit party being campaigned by Nigel Farage there could be something of a revolution in British politics. The local elections could also see a major shift in voting patterns, with this carrying much risk for the pound. Any big changes could result in major volatility for the GBP vs AUD pair.
  9. Anthony from Moneycorp

    GBP and AUD Update

    The Pound to Australian Dollar exchange rates drifted lower on Tuesday afternoon, this comes as Theresa May went on a last minute charm offensive in Paris and Berlin in attempt to persuade Emmanuel Macron and Angel Merkel to back her request for a short Brexit extension. EU leaders will decide on Wednesday whether to grant Theresa May another Brexit delay or leave the UK to face a no- deal Brexit on Friday, an outcome that will unnerve most GBP investors. Demand for the Pound is unlikely to see any significant improvement in the near term, with investors wary ahead of Friday’s Brexit deadline.Unless Theresa May agrees another deadline extension with EU leaders the GBP/AUD exchange rate looks set to remain biased to the downside this week.If a sense of clarity over the UK’s future relationship with the EU starts to emerge, though, the Pound could recover some of its recently lost ground.On the other hand, if May fails to secure a further extension of the current deadline GBP exchange rates may come under further pressure as the risk of a no-deal Brexit intensifies. AUD exchange rates could find fresh encouragement on the back of February’s Australian home loans and investment lending figures, meanwhile.Forecasts point towards home loans bouncing back from the previous month’s -1.2% contraction, delivering modest growth of 0.5% on the month.While investment lending is expected to remain within negative territory any improvement on January’s contraction may give the Australian Dollar a modest boost against its rivals.However, if Australian lending shows signs of weakening as consumers and businesses rein in their borrowing this could offer the GBP/AUD exchange rate some support.
  10. Anthony from Moneycorp

    GBP and AUD Update

    The pound to Australian dollar exchange rate has fallen over the last week to the tune of 3 cents for GBP/AUD. The markets are preparing for a volatile few days ahead as Brexit remains the main driver for the GBP to AUD pair. Today in Parliament will be a debate on extending Article 50, whilst discussions between the two main political parties continue to try and find cross party support for a deal on Brexit. So far, whilst discussions have been technical they have failed to bear fruits, adding another layer of uncertainty to the fraught negotiations. The Government also announced its intention to contest the European elections on 23rd May 2019 having written to candidates yesterday to prepare. If a deal were to be reached between Labour and the Conservative Party before these elections then the requirement to contest them would be removed. How things unfold from here will very much depend on the emergency EU Brexit summit tomorrow which will seek to allow Britain more time to find a majority in Parliament for a way forward. As things stand the deadline for the UK is this Friday. Even if the EU offers the UK an extension it remains to be seen whether Theresa May will be able to find sufficient common ground with the opposition Labour Party to get a majority in Parliament for her deal or a revised version of her deal. Any statements are likely to create significant volatility for GBP vs AUD in the days ahead.
  11. Anthony from Moneycorp

    AUD and GBP Update

    Of late Pound Sterling and the Australian Dollar have been two of the best-performing major currencies in global FX markets: it is therefore little wonder that the GBP/AUD exchange rate reflects something of a deadlock. As such, the GBP/AUD exchange rate is trading at 1.8338 at the start of the new week, little changed from the week before. Sterling has exhibited strength on the back of the news that Theresa May was reaching out to Jeremy Corbyn in order to try to forge a consensus on Brexit that could actually result in a deal that a majority in the House of Commons might support. The Australian Dollar has meanwhile benefited from a robust recovery in global investor sentiment, with markets being particularly optimistic that a trade deal between the U.S. and China is nigh.
  12. Anthony from Moneycorp

    AUD and GBP Update

    The Australian Dollar was trading on its back foot Tuesday ahead of the release of February retail sales data, which will help markets to answer the question of whether 2018's economic weakness carried forward into the New Year. Economic growth has faltered, in large part, due to the impact that declines in house prices have had on household confidence and spending. However, President Donald Trump's trade war with China also dented business confidence the world over in 2018, as well as the Australian Dollar. Currency markets care about the retail data because of the impact rising and falling demand has on inflation. It's changes in consumer price pressures that central banks are attempting to manipulate when they tinker with interest rates, which are themselves the raison d'être for most swings in exchange rates.
  13. Anthony from Moneycorp

    Quarterly Overview of the AUD

    The numbers presented a mixed, but largely steady picture in Australia. The gross domestic product data showed that Australia's' economy grew more slowly in Q4; by 0.2% instead of the expected 0.3%. Annual growth was 2.3%, down from 2.8% three months earlier. At the beginning of the year, there were signs that the trade surplus was narrowing. One of the more influential statistics for the Australian dollar was the AiG Performance of Manufacturing Index. It was up by a point and a half in February at 52.5. Data relating to housing and employment also had an effect on the Aussie’s value. House prices in Australian capital cities fell an average of 2.4% in the fourth quarter of 2018, leaving them 5.1% lower on the year. It marked the longest run of losses since 2011. At the end of the quarter, data showed that unemployment fell to 4.9%, its lowest level since 2011. However, less than 5,000 of the jobs were new ones and there was a 15k swing from full-time to part-time employment. Investors were not totally impressed. Consumer confidence deteriorated by 4.7% to 99.6 in December, according to a Westpac survey and this trend continued into January. February's rebound did little more than reverse the previous month's decline and the onepoint improvement in business confidence, from 3 to 4, still left the measure below trend. However, by March surveys by NAB and Westpac found business confidence fading from 4 to 2 while consumer confidence was down by 4.8% to 103.8.
  14. Anthony from Moneycorp

    AUD Update

    The Aussie took third place behind the Japanese yen and US dollar. It lost narrowly to the USD and strengthened by two thirds of a cent against the pound. Australian economic data were conspicuous by their absence. The only ones to appear were for private sector credit in February. Lending to individuals and companies increased by a monthly 0.3% and was 4.2% higher on the year. Investors did not really notice. What they did notice, though, was guidance from the Reserve Bank of New Zealand that its next change to interest rates was likely to be a cut. Although there is no direct link between the RBNZ and the Reserve Bank of Australia, investors decided that such a move would be likely to affect the thinking of the RBA. It does not have much room to take rates lower but it might be inclined to try to find some.
  15. The pound to Australian dollar exchange rate has been testing some of the best levels since before the EU vote June 2016. Brexit is however far from settled and we could easily see some big changes in the currency markets soon. Positivity from Brexit could easily see the GBP/AUD rate top the 1.90 level, whilst the threat of no-deal Brexit could sink us back below 1.80. This week has seen the pound to Australian dollar exchange rate drop back slightly from the higher 1.80’s and the 1.8830 reached on the 14th March, as Theresa May’s position remains very much under threat. There is currently uncertainty over whether or not she is likely to have her job at the end of this week! The outlook for GBP/AUD rates is very mixed as we approach the finality on Brexit. Much will hinge on what lies head for the rest of this week. Theresa May is supposed to be having another ‘meaningful’ vote although these appear to be quickly becoming meaningless in my opinion. Last night parliament voted to take control of the some of the next stages which could open us up to a second Referendum or General Election. Mrs May is still determined to have her vote but it is looking increasingly like she will struggle and in any event it will be voted down. Clients expecting some certainty this week on Brexit will now find the dates of the 12th April and the 22nd May more interesting. These are the dates given by the EU as an extension. The latter date being conditional on Mrs May’s Brexit deal being passed by the Government, which is so far not looking likely. Those buying Australian dollars might wish to use this uncertain time to be making key preparations around what is likely to be a very turbulent period for GBP/AUD rates.
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