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Found 38 results

  1. Guest

    Weekly Cost of Living UK

    Thought this might give anyone thinking of returning to the UK some guidelines on weekly living costs. These are based on our weekly living costs as a married couple without children so there are just two of us, at present anyway. We've been back in England for 18 months, own and run a business, live very well I have to say, husband works in a salaried job and I run the business. We're about to move into another house, renting first but looking to buy also. Semi detached, bedroomed house, village location, 2 miles from the business, large garden, parking, nice area, etc. Rent/Mortgage 650.00 month Rates, (inc water) 120.00 Gas, Electric, Telephone 80.00 Standing Orders 130.00 (insurances, life cover, private health) Food 300.00 Going out, other expenses 400.00 Total monthly 1680.00 Weekly 390.69 I haven't included petrol because it's a minimal expense for us, husband has a company vehicle and I only drive 2 miles to work. After this it's a leisure expense so it's included in going out. We have no borrowing, loans, credit cards or repayments. I've calculated these figures based on our living costs over the last 12 months and they have pretty much stayed the same. Obviously, having no ties, ie young children, we do go out a lot. Mobile phone and broadband are on top up (pay as you go). Cars are bought and paid for.
  2. Guest

    Weekly costs Melbourne

    Hi, I've put together a weekly costs list for Melbourne, based on a family of four. No idea if this is realistic or not, for those of you out there, how does it look? (PS Petrol is low as this would be covered by my husband's job) Rent 400 Food 400 Electricity & Gas 75 Water 25 Council Tax 25 House insurance 25 Phone 15 Broadband 15 Mobile 30 Rates 20 Life Insurance 40 Petrol 25
  3. Hi, Just want to know how do I calculate for my weekly pay? Most job stated wages for annually? So do I divide to 12 months, and again divide to numbers of days working for that particular month? Is there a formula for this? How about calculation for tax and superannuation? Yr help is much appreciated. :cute: Cheers
  4. Guest

    Weekly weigh-in

    Hi Peeps:biggrin: thought it might be a good idea for those of us with a weight issue to get together for a regular Sunday weigh-in, giving height, starting weight and target, also saying what your that weeks loss was. We could support each other through the week, unlike such as weightwatchers where you only get together once a week, this would be 24/7, being there at times of need, when that bar of delicious chocky jumps out at you, or that lovely fresh cream cake rears it's lovely head, the idea is just log on and tell someone for support. This is for males and females, no descimination just support. :wink: Height......5ft 7ins Weight......11st 9lbs Target weight.....10st 7lbs A warm welcome to all:wink: Lesley
  5. NurseAng

    Weekly Expenses Sydney

    Hello Everyone I know this thread has been done lots before but I've complied a budget based on the information I've found on the site and wondered if anyone could comment on whether it is realistic. It's for a family of 4 with 5 and 3 year old children. I've tried to include everything including clothes, xmas presents etc but hopefully haven't missed anything out. Any comments would be gratefully received, especially if they reduce the total amount we need to earn as I know there are an awful lot of people who earn a lot less than I've calculated that we need to! :smile: Gill Rent 600 Food 400 Electricity & Gas 75 Water 25 Council Tax 27 House insurance 25 Phone 15 Broadband 15 Cable tv 15 Mobile 30 Rates 20 Petrol 100 Car tax etc 50 Road tolls 15 Life Insurance 40 Health insurance 60 Haircuts 10 Sports / Days out 50 Presents inc b'days & xmas 25 Holidays 100 Misc 75 School fees 385 Total per week 2167 Total per month 9389 Total per year 112664 Combined Gross Salary therefore needed to be $155,000!!!
  6. We are doing some budgeting and were wondering whether the weekly rental that gets quoted on say Domain etc includes for the Aus equivalent of council tax (if any ?), and any of the utilities costs Anybody know ??
  7. THINGS WILL BE DIFFERENT ON FRIDAY UK general election looms over sterling. AUD rates up again, to 4.5%; analysts expect a pause next month. Sterling made a half-hearted effort to push above $1.67 on Tuesday morning. It quickly went into reverse and its next stop was at $1.6350. Early on Monday morning it returned to last week's starting point at $1.6650 but it was only a brief visit and the pound was a cent lower when London opened this morning. UK economic data played only the most minor role in sterling's fortunes. Of just a handful of figures only two did not relate to the residential property market. They were not very helpful. The CBI's distributive trades survey, a measure of retail sales, was steady at 13 and Gfk's consumer confidence index declined from -15 to -16. Mortgage approvals (the British Bankers' Association version) went up very slightly to 35k in March but fell well short of the 43k that analysts had predicted. The most positive result came with Nationwide's house price index. A +1.0% increase in April left prices 10.5% higher than a year ago. Although the UK general election loomed ever larger over the currency, the prospect of a hung parliament did no particular damage. The most recent opinion polls put the Conservative party in the lead with the Liberal Democrats and Labour fighting for third place. If that were to be how the voting went and if it were to translate directly into parliamentary seats (neither can be assumed) a Conservative/Lib Dem coalition would be the most likely outcome. Investors fancy that between them Mr Cameron and Mr Clegg would be able to come up with a suitable plan to reduce the deficit. (The market's main problem is the three parties' steadfast refusal to explain which taxes will go up, where the spending cuts will come and how deep they will be.) Business confidence in Australia was a tick higher in the first quarter of the year, rising to 17 from 16, and new home sales were up by +0.9% in March after falling by -5.2% in February. Lending to businesses and individuals continued to grow, with a +0.5% increase that accelerated year-on-year expansion to +2.1%. The two strongest figures were those for inflation and house prices. House prices rose by 4.8% in the first three months of the year and are a fifth higher than a year ago. Inflation jumped from 2.1% to 2.9%. It was those last two that probably made up the mind of the Reserve Bank of Australia Board when it decided on Tuesday to raise the cash rate from 4.25% to 4.5%. The RBA said in its statement that the Australian economy is recovering more quickly than expected and that the terms of trade (export prices relative to import prices) could well return this year to the highs of 2008. The RBA 'expects that, as a result of today’s decision, rates for most borrowers will be around average levels [which] represents a significant adjustment from the very expansionary settings reached a year ago' when the cash rate was 3.0%. It looks as though the RBA is sending a signal that it will wait to see the effect of its last six rate increases before it makes a further move. Its next decision comes on 1 June and the feeling at the moment is that there will be no advance from 4.5% at that point. The early part of the week could well be a period of relative calm for sterling. Investors have made their best guess about the outcome of the election and what it will mean and must now sit on their hands to see what transpires. That enforced relaxation could well come to an end when the polls close and the results of the first exit polls hit the newswires on Thursday night. If ever there was a time for FX market users to join the ranks of the 'don't knows' this is it. If a weaker pound would totally scupper your investment plans the only safe course of action now is to cover the exposure completely. Otherwise, buyers of the Australian dollar should hedge 50% of their requirement and review the situation on Friday morning. Consider leaving an order on Thursday to provide protection in case there is a violent move as the results come out.
  8. STERLING IGNORES PROSPECT OF HUNG PARLIAMENT Mostly positive UK data but GDP disappoints. Good-news-bad-news treatment from the RBA. There was movement in the GBP/AUD exchange rate last week but in the end it did not take it far. The pound added a net half cent to open in London this morning at $1.6650. The extremes of its range were Wednesday's $1.6450 low and a high above $1.67 on Friday. With the opinion polls pointing ever more precisely to a hung parliament after next week's general election the FX market gave every impression that it had come to terms with such an outcome. Sterling was a winner on most fronts and its trade-weighted index ended the week just short of 80, almost exactly the same level at which it began the year. It received considerable help from most of the week's economic data. Tuesday's consumer price index figures showed inflation accelerating again to 3.4%, a level that investors thought might be high enough to influence the Monetary Policy Committee. Yes, the Bank did warn that inflation would speed up before it fell back to its target zone, but what if it does not fall back? The question itself was enough to raise the spectre of higher UK interest rates and, with it, the pound. Wednesday's employment figures were less compelling but a 33k shortening of the dole queue was positive enough. Thursday's money supply figures revealed total government borrowings of £163.4 in the financial year just ended, slightly less than last month's budget forecast and 8% below the chancellor's original estimate. Friday's first estimate of overall economic performance in the first three months of the year was far from helpful though. For the third time on the trot, economists and investors overestimated quarterly expansion of gross domestic product. Instead of the expected +0.4% they had to cope with +0.2%. Sterling reacted just as it had done to identical situations in October and January. It went down. But not for long. In a week with very few hard economic data investors had to pick the bones out of a Westpac leading index that went up from +0.2% to +0.5%, a -2.7% monthly fall in new vehicle sales and a +0.3% rise in import prices. None of the figures set pulses racing. Fortunately, the Reserve Bank of Australia was ready to step in and get things going. On Tuesday the minutes of the RBA's last policy meeting made investors more confident that the cash rate would see a sixth increase next month. The AUD jumped a cent higher on the news. Having wound the market up on Tuesday RBA governor Glenn Stevens did the opposite on Friday. He said in a speech that Australian interest rates are 'pretty close' to the 10-12 year average and that their future course is an 'open question'. Whether deliberately or not, he poured cold water on investors' expectation that Aussie rates are heading for the sky. Whether or not the RBA decides to increase rates next month could all depend on 1thursday's inflation figures. Sterling's ability to shrug off the opinion polls and the disappointing GDP figure gives room for guarded optimism but, with the election only ten days away and higher AUD interest rates in the wind, there is little prospect of any substantial rally. Buyers of the Australian dollar should hedge 50% of what they will need - maybe more if they want to take advantage of the trend high near current levels. If the money is required in the near future they should consider covering the whole amount.
  9. ANOTHER USEFUL WEEK FOR STERLING No surprises from the Bank of England. Good Australian employment figures disappoint over-ambitious investors. The $1.63 - $1.67 range held sterling steady for a fifth week. The pound did not quite touch either side of its horizontal channel but it came close to both. It opened in London this morning at $1.66, a cent higher on the week.Against the majority of currencies it was another useful week for sterling, despite conflicting economic data and opinion polls that continued to point to a hung parliament. There was even disagreement among supranational agencies as to how Britain should address her budget deficit. The Bank for International Settlements sided with (what investors assume to be) the Tory strategy of wielding the axe on public spending as soon as possible after 6 May. If the UK is to avoid spending a quarter of its gross domestic product on interest payments in 30 years' time the BIS said there would have to be 'drastic' austerity measures. The Organisation for Economic Co-operation and Development, on the other hand, supported the Labour view that to slash spending now would be to choke off recovery before it has properly begun.The UK services sector purchasing managers index was at the same time good news and bad news. The good news was that, at 56.5, it was a point clear of its nearest competitor. The bad news was that it was two points down while the opposition was at least two points higher on the month. Industrial (+1.0%) and manufacturing (+1.3%) production data were better than expected and a vast improvement on the previous month's negative figures. The same was true of the Halifax house price index, which was 5.2% higher on the year. With the election campaign under way there was no chance of any surprises from the Bank of England's Monetary Policy Committee, which issued a no-change statement almost identical to the one it put out in March. Indeed, the May meeting has been postponed to the 10th in order to avoid any possibility of interference with polling day.With the Reserve Bank of Australia's interest rate increase out of the way on Tuesday there was not much to keep the Australian dollar entertained during the remainder of the week. The AIG performance of services index was fractionally higher in March, 48.4 as opposed to 48.3 the previous month. Unfortunately it looked a bit sad in comparison with similar (but not identical) measures elsewhere, all of which were in the expansion zone above 50.On the face of it there was nothing sad about Thursday's Australian employment data. New job creation in March amounted to 19,600; within a thousand of analysts' predictions. It was a decent enough number but clearly not decent enough for the investors who had been spoiled by better-than-expected figures in previous months. The disappointment lingered on Friday and over the weekend, partly as a result of the Canadian dollar encountering an identical setback. The UK general election means risks for the pound in the next month. Even so, the pound's six-week range shows no sign of breaking in either direction. Buyers of the Australian dollar should hedge 50% of what they will need - maybe more if they want to take advantage of the trend high near current levels. If the money is required in the near future they should consider covering the whole amount.
  10. Weekly currency update from Moneycorp [moneycorp]10168283[/moneycorp]
  11. Weekly currency update from Moneycorp [moneycorp]10168283[/moneycorp]
  12. CLEAN SHEET FOR STERLING UK budget leaves sterling unmoved. Australian rate hikes forecast for April and May. A three-cent range kept the pound between $1.6250 and $1.6550. It spent most of its time between $1.63 and $1.64 and opened in London this morning unchanged on the week at $1.64. After their experience the previous week when members of the Monetary Policy Committee twice spooked the market by mentioning 'double-dip' recession, investors were nervous when the governor of the Bank of England gave a speech to the Royal Society. They need not have worried. Dr King did include a caution that 'the level of activity is still very likely to remain weak for a considerable period' but that was all. It was nothing the market couldn't live with and sterling lived to fight another day. Tuesday's consumer price index data were no help to it though. Having spiked to 3.5% in January inflation fell back to 3.0% in February, just on the edge of its target range. The feeling was that the Bank might have been correct in its prediction that inflation would come back into line. As it does so it removes any need for higher interest rates, instead reawakening the prospect (dim though it is) of further quantitative easing. Thursday's UK retail sales figures were almost good. Rather than the +0.6% monthly improvement that analysts had predicted, sales rose by +2.1% in February. Unfortunately, a significant chunk of that improvement was wiped out by a downward revision to the January number. Compensating for the relative shortage of UK economic data during the week was the chancellor of the exchequer's election announcement on Wednesday. Of course he did not set a date for the vote but some of the policies he announced were so theatrical that they could be nothing other than a campaign gambit. The bilateral taxation agreement with Lord Ashcroft's Belize raised a laugh. The imposition of a 5% stamp duty on Conservative voters' palaces got a nod from the Morning Star and the stamp duty holiday on socialists' quarter-million pound hovels brought a shrug from economists, who foresaw another distortion of the residential property market. The chancellor's words had no effect on sterling; at the end of the speech it was exactly where it had been at the start. Investors are much more interested to see what the post-election spending review will bring. The Australian economy maintained an almost subterranean profile. Motor vehicle sales were down by -1.9 % in February, having fallen by -3.5% the previous month. The only other event was the publication of the Reserve Bank of Australia's six-monthly Financial Stability Review. There was nothing in it to set the Australian dollar on fire but the tone was positive. Economists reckon that Australian interest rates could rise by another two percentage points between now and the end of next year as the economy gets back to normal. Increases of 25 basis points are forecast for April and May, with another 75 basis points between then and December. Since the beginning of the month GBP/AUD has changed direction six times and has gone almost nowhere. Buyers of the Australian dollar should hedge 50% of what they will need. If the money is required in the near future they should consider covering the whole amount.
  13. Moneycorp's weekly review of the British Pound and Australian Dollar. [YOUTUBE]Q_4PYDyr8NI[/YOUTUBE]
  14. STERLING RIDES MOST OF THE BLOWS Poor economic statistics and unhelpful comments rain down on sterling. RBA attention is now firmly fixed on the upturn. It was almost another losing week for sterling but in the end it just about managed to open in London unchanged at $1.66, close to its highs. The low came in mid-week at $1.6250. In a dull week for hard data the British economy did not have a whole lot to say for itself and what it did manage to scrabble together was not particularly edifying. Two house price indices, one from the Royal Institute of Chartered Surveyors and the other from estate agents' website Rightmove, damned the property market with faint praise. The RCIS house price balance, which compares the number of members reporting higher prices with those reporting lower ones, fell from 32% to 17%; still positive but more reservedly so. Rightmove's index of asking prices went up by 0.1%; positive buy only by a technicality. UK industrial production figures were a bigger disappointment and took sterling to the lows of the week. Production (manufacturing, mining and energy lumped together) fell by -0.4% in January. Manufacturing alone was down by -0.9%. January's trade deficit was £8 billion, the biggest since August 2008. Between August '08 and January '10 Sterling's trade-weighted value became 23% weaker yet imports were up and exports were down. The significantly more competitive currency is still not having any positive effect on the balance of trade. Sterling also had to contend with unhelpful comments from several quarters. Credit ratings agency Fitch was 'uncomfortable with the fiscal adjustment path set out by UK authorities' and looked for 'more credible and stronger fiscal consolidation plans during 2010. Credit Suisse anticipated that UK banks, collectively, would have to reduce their balance sheets by more than £500 billion over the next three or four years in order to meet new regulations. The prime minister reassured investors that Britain's AAA credit rating was solid but not all of them were convinced, especially the researchers at UniCredit Bank who predicted that the government would have problems selling all the bonds they need to shift to finance the budget deficit. The Australian economic data were less of a disappointment than those from the UK but they were not exactly inspiring. NAB's business conditions index improved from 3 to 8 and consumer confidence crept into positive territory, rising from -2.6% to +0.2%. Investment lending edged +0.9% higher in January but home loans were down by a -7.9% after falling by -5.1% the previous month. A +2.0% increase had been predicted. Consumer inflation expectation were steady at 3.2% but there was not such good news on the employment front. Unemployment edged up from 5.2% to 5.3% in February with the number in employment rising by 400, just a fraction of the 15,000-odd jobs analysts had been expecting. Rob Lowe, the assistant governor of the Reserve Bank of Australia, dismissed any gloom with an upbeat speech. He said 'the central scenario for the Australian economy is a positive one with growth over the next couple of years at, or above, average, a relatively strong labour market, and inflation consistent with the medium-term target.' The operative phrase there was 'at, or above, average'. The RBA has put behind it any concern about and economic slowdown and is now focused firmly on the upturn. Sterling surprised many with another refusal to lie down last week despite a string of potentially damaging developments and data. However, as long as the opinion polls continue to indicate a hung parliament investors will continue to fear that even after a general election Britain's government will be unable or unwilling to tackle the budget gap. Buyers of the Australian dollar should hedge at least 50% of what they will need. If the money is required in the near future they should consider covering the whole amount.
  15. LUCKY ESCAPE FOR STERLING Positive economic signs from the UK economy allow a near-miraculous recovery for sterling after a sharp fall. Australian interest rates go higher and there is more to come. Sterling fell sharply last Monday, losing nearly three cents before lunch. It bottomed out at $1.65 and spent the rest of the week consolidating between there and $1.6750. It opened in London this morning at $1.66. At the beginning of the week the non-domiciled tax status of Baron Ashcroft dominated the media. Allegedly, the noble lord had bought his way into a peerage by making large donations to the Conservative party. For some reason this old tradition had become suddenly improper. It would be an exaggeration to blame sterling's sharp fall on Lord Ashcroft alone but the story will certainly have unnerved investors who were already nervous about the Tories failing to win a majority at the forthcoming general election. From there it was uphill all the way but at least sterling managed to make it up the hill with the assistance of some positive news. On Tuesday the government held a successful auction of 30-year gilts which attracted bids for nearly twice that much. The last five auctions of 30-year stock have achieved an average of 1.63 times cover so, whatever misgivings they may have about sterling's short-term future, there is a degree of confidence among investors the current problems will be short-lived. Having ignored Monday's manufacturing purchasing managers' index (their minds were on other things) investors took a great deal of interest in Wednesday's services sector PMI. At 58.4 the services PMI was more than three points better than predicted, scoring a three-year high. It blew America's 53.0 and Euroland's 51.8 into the weeds. Coming hard on the heels of a ten-point jump in consumer confidence it was another reminder to the market that not everything to do with Britain's economy is in a state of collapse. There was more reassurance from the Bank of England when the Monetary Policy Committee voted to keep interest rates unchanged for a 13th month and to leave quantitative easing on hold. The handful of data that appeared last week did little to spoil the image of a thriving, recession-proof, Australian economy. AiG's (that's the Australian Industry Group not the egregious American derivatives punter) performance of manufacturing index went up from 51.0 to 53.8 in February while the services equivalent rose by a point to 48.3. They are not exactly purchasing managers' indices but they work in the way; the further above 50.0 the index goes, the more positive the outlook. Retail sales were up by +1.2% in January while building permits were -7.0% fewer on the month. Updated figures confirmed growth of +0.9% for the economy in the fourth quarter of 2009. Having disappointed the market a month ago by not raising interest rates when everyone thought it would, the Reserve Bank of Australia eventually got round to it on Tuesday. The cash rate went up from 3.75% to 4.0%. In his statement Glenn Stevens, the RBA governor, said 'interest rates... remain lower than average' and that 'it is appropriate for interest rates to be closer to average.' That does not mean a rate increase at every meeting but it does mean there is more tightening to come. Whilst sterling's recovery last week might be seen as a sign that there is life in the old dog yet, it is still hard to see the British currency as anything other than a dog. Opinion polls continue to indicate a hung parliament and investors fear that even after the general election Britain's government will be paralysed by indecision, unable or unwilling to tackle the budget gap. Buyers of the Australian dollar should hedge at least 50% of what they will need. If the money is required in the near future they should consider covering the whole amount.
  16. ANOTHER WEEK OF PUNISHMENT FOR STERLING Upward revision to fourth quarter economic data does sterling no favours. RBA interest rate increase expected on Tuesday. The pound showed early promise on Monday and Tuesday, rising from Monday's $1.7150 to reach $1.74 at midweek. It spent the second half of the week heading south, opening in London this morning at $1.68. Robert Stheeman, the chap responsible for issuing UK government bonds, managed an upbeat tome when he addressed a conference in London. He said that 'politicians of all colours are taking the [public sector debt] situation very seriously indeed. Investors derive a lot of comfort that there is agreement across the spectrum that the deficit needs to be brought under control.' Mr Stheeman also suggested that a hung parliament might be 'less disruptive' than assumed. Unfortunately the market did not share his optimism and sterling spend most of the week on the slide. The rot started, as it so often does these days, with cautious words from Bank of England Governor Mervyn King to parliament's Treasury Committee. He did not go out of his way to talk sterling lower but, by refusing to rule out the possibility of further quantitative easing, made it sound as though the Bank's printing press is ticking over and ready for more action. The governor's comments coincided with news that mortgage approvals had dropped sharply in January with the end of the stamp duty holiday. Sterling spent the rest of the week rolling from one punch after another as investors lightened their holdings. A sharp fall in business investment at the end of last year saw investment down by 24.1% for the full year. Consumer confidence improved by three points but at -14 it still had a minus sign in front of it. Nationwide reported a -1.0% monthly fall in house prices after nine months of improvement. Britain's overall economic performance in the fourth quarter of 2009 was revised to show growth of +0.3% instead of the +0.1% previously reported but third quarter shrinkage was also revised, from -0.2% to -0.3%. Government spending in the fourth quarter was much higher than expected. Among the week's handful of Australian economic statistics none was interesting enough to do anything to the AUD. Motor vehicle sales fell by -3.4% in January. The wage price index went up by +0.6% in the fourth quarter but the annual rate of increase fell back from +3.4% to +2.9%. Australia's leading index improved from -0.3% to +0.6%. Private capital expenditure was strong in the fourth quarter of last year, rising by +5.5% to offset the -5.2% decline between June and September. All these numbers will help to inform the Reserve Bank of Australia's monetary policy decision on Tuesday but nobody is in much doubt about the outcome. After a pause in its tightening process the RBA is confidently expected to raise its cash rate from 3.75% to 4%. Never mind that equally confident expectations a month ago came to nought; a no-move decision tomorrow would be a big surprise. The pound has fallen to new lows. It has taken what looks, on the face of it, like an unfair beating. A bounce is not out of the question but it is not easy to see how that will happen. With opinion polls closing the gap between Labour and Conservative to almost nothing investors fear that even after the general election Britain's government will be paralysed by indecision, unable or unwilling to tackle the budget gap. Buyers of the Australian dollar should hedge at least 50% of what they will need and increase that proportion if the pound makes new lows. If the money will be required in the near future they should consider covering the whole amount.
  17. JANUARY SPENDING GAP HURTS STERLING Jump in UK inflation is a 'temporary deviation'. AUD interest rates are on an upward trend but will not be rising every month. In an expensive week for sterling the currency lost four and a half cents, falling from $1.7650 to $1.72. Never did the pound manage to poke its ahead above last Monday's opening price and the low came early this morning at $1.7150. The week got off to a slow start with bank holidays in Switzerland, Canada and the United States. The lunar new year put China and much of the Far East on a go-slow for several days. Things started to become interesting for sterling on Tuesday with January's consumer price index data. As most analysts had predicted - and the Bank of England had warned - CPI inflation jumped from 2.9% to 3.5%, appreciably above the Bank's 1%-3% target range. In the Governor's compulsory open letter to the chancellor he called it a 'temporary deviation' and repeated his belief that 'weakness in spending... will bear down on inflationary pressures over time.' If that was the good news, the bad news on Thursday was that the Treasury had had to borrow £4.2 billion in January. The Treasury never has to borrow money in January; that's when a big chunk of the annual tax revenue comes in. The Times summed up the situation as 'On borrowed time: shock deficit threatens UK recovery.' January's retail sales figures, released on Friday morning, were no help to sterling either. The -1.8% monthly decline was a surprise to forecasters, as was the downward revision which showed sales falling in December as well. An interesting debate in the press showed how opinion is divided about what course of action the government should take to bring its budget deficit back into line. The Sunday Times printed a letter from 20 respected economists highlighting the dangers of Downing Street doing nothing. Friday's Financial Times carried a response from 60 other, equally well-respected, economists saying that nothing is a very good thing to do until the economy gets back on its feet. Although disagreement among economists is nothing new, the exchange of views highlighted Downing Street's dilemma. The only useful statistics to emerge in Australia last week were of the private-sector variety. NAB's survey of business conditions delivered a surprising seven-point drop from +10 to +3 in January. Westpac's Leading index, which aims to show how the economy will be doing in three to nine months' time, registered 6.2% in December. It was more than twice as high as its 2.7% long term trend and a whole lot better than May's -6.9% low. The Reserve Bank of Australia was the main driver for its currency. The minutes of its February policy meeting reassured investors that the decision to leave interest rates steady did not mean an end to the tightening process. In so many words the RBA stated that 'further increases in the cash rate were likely to be necessary' whilst noting that policy makers 'did not regard that outlook as requiring an increase at every meeting.' Governor Glenn Stevens told much the same story later in the week to a House or Representatives committee when he said; ' further adjustments to monetary policy will probably be needed over time to ensure that inflation remains consistent with the target over the medium term.' Sterling is exploring new long-term lows but remains within a downward-sloping trend. Buyers of the Australian dollar should continue to hedge 50% of their requirement, using a stop order to protect the downside in case of disaster.
  18. A PANIC-FREE WEEK FOR STERLING Sterling makes the most of its I'm-not-a-euro credentials. Australia delivers some impressive employment figures. A short-lived rally almost to $1.81 gave way to a more sustained decline. It bottomed out on Thursday at $1.75 to open in London this morning at $1.7650. Sterling has been doing its best to develop a career in not-being-a-euro. With the problems in Greece holding investors' attention, the pound wore a badge of non-involvement on its sleeve and managed to avoid the banana skins which usually litter its path. UK economic data were fairly well balanced between the helpful and the hurtful. Retail sales suffered in January because, according to the industry body BRC, arctic conditions kept shoppers at home. Britain's trade deficit widened again in December, suggesting that exporters are not using the weak pound to price their goods more competitively in foreign markets. There was better news from industry. Manufacturing production grew by a decent +0.5% in December and the broader industrial production (which includes mining and suchlike) was up by +0.9%. The Bank of England's Quarterly Inflation Report (it does what it says on the tin) raised the spectre of a further round of quantitative easing. It was a possibility that sterling's supporters would have preferred not to see. There is still the impression - warranted or otherwise - that the Bank is happy to see the pound weaken and that it chooses its language to help that cause. The Australian dollar might have pottered through the week alongside its NZ cousin had it not been for another data shock. A week previously the Reserve Bank of Australia's failure to deliver an interest rate increase had cost the AUD two cents. This time the boot was on the other foot. Early on Thursday Australia's January employment report showed a near 53k increase in the number of people with jobs and a fall in the unemployment rate from 5.5% to 5.3%. Both were way ahead of forecasts and expectations. Sterling is slipping back towards its 25-year lows. At current levels there is little point in increasing the proportion of one's cover but precautions should be taken in case the rot sets in. Buyers of the Australian dollar should continue to hedge 50% of their requirement, using a stop order to protect the downside in case of disaster.
  19. GREEK PROBLEMS OVERSDHADOW ALL MARKETS Investors still not convinced that Greece can sort itself out without external help. Sterling and Aussie lumped with 'risky' currencies as dollar and yen push ahead. RBA rate pause does no lasting damage to AUD. A four-cent range centred on last Monday's $1.8050 took the pound nowhere. It opened in London this morning a meaningless half-cent down on the week at $1.7950. Until a month or so ago the world's investors were still dismissing the fiscal problems of Greece as nothing more a little local difficulty in an unimportant south eastern corner of Europe. They were far more interested in how the German and French economic locomotives were hauling the rest of the continent ahead. Now, the tables are turned. Hard economic data, good or bad, get barely a moment's attention. Instead, the focus is on the fiscal crisis in Greece which temporarily overshadows not just the euro but every currency and every market. The European Commission, the European Central Bank and the Euroland governments appear to have hardened up their attitude to Athens and the message to Prime Minister Papandreou is 'Sort yourself out or else.' Investors worry that it will not be as easy as that. Especially during the second half of last week the overriding sentiment among investors was a nervousness about everything. In a return to the risk-aversion tactics of last year they offloaded shares and reduced their holdings of 'risky' currencies, stocking up instead with the safe-haven US dollar and Japanese yen. Whilst it would be an exaggeration to call the trend a 'flight to safety' it was certainly a sign that there are still plenty of niggling doubts to trouble investors. Despite all the public optimism that a double-dip recession is out of the question, the market mumbles to itself about the risk of just such an outcome. As long as that mindset persists, national economic statistics and achievements will have to be spectacular if they are to offset investors' underlying attitude to particular currencies. This was clearly the case last week for sterling. The purchasing managers' indices (PMIs) are an important economic barometer, showing growth when they rise above 50 and pointing to a slowdown when they move below that level. Monday's UK manufacturing sector PMI came in at a surprisingly strong 56.7, beating equivalent figures from France, Germany, Switzerland and the Euro zone. With sterling in their bad books, investors refused to be impressed. At 54.5 Wednesday's services sector PMI was higher than any of the opposition but, because it was two points lower than the previous month, investors used it as an excuse to sell the pound. They had an even better excuse to sell the Australian dollar after the Reserve Bank of Australia's board meeting. Everybody knew the RBA was going to raise its policy interest rate - the 'cash rate' - from 3.75% to 4.0% on Tuesday. They had even printed the souvenir tee-shirts with the date on them. Well they went in the bin. The RBA board, in its wisdom, 'judged it appropriate to hold a steady setting of monetary policy for the time being.' The news cost the Aussie an immediate cent against the US dollar, one and a half against the Kiwi and two against the pound. Sterling is well off its 25-year lows and there is no obvious threat of a relapse. That does not mean its future is assured, especially in view of the political and credit risks faced by the United Kingdom. Buyers of the Australian dollar should hedge 50% of their requirement.
  20. GROWTH AND CREDIT STATUS DRAG STERLING DOWN Britain emerged from recession in Q4 - just. Australian rates likely to rise this week. Compared with its lack of performance elsewhere the pound did tolerably well against the Aussie dollar. It never traded below last Monday's $1.78 starting point and made four serious attempts to break above $1.81. It was only half a cent below that level when London opened. The week began with optimism that figures for the fourth quarter of 2009 would confirm that, after 18 months, Britain had at last managed to put the recession behind. Having overestimated growth in the third quarter, analysts were quietly confident with their guess that gross domestic product expanded by +0.4% in Q4; not fantastic growth but acceptable under the circumstances. Again there was disappointment. At +0.1% quarterly growth was the smallest ever seen. The optimists who had filled their boots with sterling ahead of the announcement were quick to offload their holdings. Surprisingly, the dismay had evaporated by the end of the following day following a speech by Andrew Sentance, the ebullient Monetary Policy Committee member who has recently made a habit of directing the market's attention to the possibility of higher UK interest rates. Addressing the British Property Federation he mentioned the word 'growth' 21 times, referred to the pound's 'competitive' position against the euro and defended the idea that monetary policy should 'keep a check on inflation over the medium term'. The market's overall take on the speech was that at least one MPC member was leaning towards higher interest rates. The old credit ratings story cropped up again on Thursday, this time with rather more than vague rumour to make it fly. Standard & Poor's, one of the big three credit ratings agencies, announced it had its eye on sterling because that 'UK banks are no longer among the world's most stable and low-risk.' It did not amount to a downgrade - Britain still has its top-level AAA credit rating - but it was an unwelcome development for sterling. The Australian dollar, like the New Zealand and Canadian versions, suffered relative to sterling as a result of a slight but pervasive nervousness among investors. Their concern stemmed from various sources. Tighter Chinese monetary policy, credit ratings nervousness in Europe and President Obama's War On Banks all contributed to concern that the global recovery is still not assured. Without a return to growth all three commodity currencies - together with many emerging market currencies - risk finding it tough going in the export markets upon which they depend. Tuesday's Australia day holiday made for a fractured week's activity and there was nothing particularly surprising among the crop of statistics. Inflation almost doubled at the end of last year with the consumer price index rising by 0.5% in the fourth quarter alone. Analysts remain confident - if not 100% convinced - that the Reserve Bank of Australia will deliver another rate hike at this week's policy meeting with a 4% cash rate that will leave room for a further half percentage point of increases by mid-year. Sterling is well off its 25-year lows and there is no obvious threat of a relapse. That does not mean its future is assured, especially in view of the political and credit risks faced by the United Kingdom. Buyers of the Australian dollar should hedge 50% of their requirement.
  21. STERLING LET DOWN BY THE DATA UK inflation lively but public sector borrowing and retail sales disappoint. Confidence data increase the likelihood of another rate increase from the RBA next month. A brief dip on Monday took the pound below $1.76 but there followed three days of higher prices. The peak came on Thursday at $1.80, after which sterling dropped back to $1.7750. It opened in London this morning off the bottom at $1.78. The UK economic data became steadily less helpful as the week went by. Monday's Rightmove house price index (which admittedly only surveys the asking price of house, not what people will pay for them) was higher again in January, leaving prices 4.1% higher on the year. Tuesday's inflation figure was even higher than analysts had expected. At +2.9% in December it was within an inch of the upper limit of its 1%-3% target band. No rate-hike reaction is expected from the Bank of England, which foresaw an inflation spike early in the year but predicted that it would only be temporary. Wednesday's unemployment numbers looked alright on the surface, with a fall in the number of dole claimants, but analysts point out that many jobseekers are ignored by the statistics and that one in five of the nation's kids live in a household where nobody has a job. Thursday's money supply figures, normally of little interest to the market, showed a disappointing fall (they should be going up). Public sector borrowing was another disappointment, hitting a record £15.7 billion in December. Friday's retail sales figures were even more of a let-down for sterling. Rather than the +1.1% monthly increase that investors had been expecting, the rise was a considerably more anaemic +0.3%. Annual growth was a percentage point short of target at +2.1%. Politics is gaining in importance with the general election only 14 weeks away. Two opinion polls published on Sunday helped muddy the waters. The News of the World's ICM poll gave the Conservatives a 38-seat majority in the Commons while the ComRes survey in the Sunday Mirror indicated a hung parliament with the Tories five seats short of an overall majority. In investors' opinion a hung parliament would be the worst possible outcome for the pound. The more likely it looks, the less likely they will be to hold onto their sterling. Having taken a bath the previous week as a result of tighter monetary policy in China the Australian dollar narrowly escaped another one, as did all the commodity currencies. The reason this time was China's announcement that its economy grew by 10.7% in the fourth quarter of 2009. The slightly ridiculous - and entirely circular - argument was that China's central bank might feel the need to tighten policy further, thus choking off the global economy. The Australian economy delivered a positive message when Westpac's index of consumer confidence leapt by +5.6%. There have been bigger increases in the past, most recently the +12.7% last June, but it was an impressive rise and has forced analysts to reappraise their expectations for next month's Reserve Bank of Australia board meeting. Whatever the outcome of the upcoming inflation figures, forecast to be something like +0.7%, the RBA could well be back on the interest rate warpath next month. Sterling is now a good ten cents off its 25-year lows but it might not be so easy for it to pull back the next ten. Although it is likely the pound will be above its current level in six months' time that is of no consequence to anyone with Aussie dollars to buy in the meantime. Buyers of the Australian dollar should hedge 50% of their requirement and be ready to cover the balance if the pound embarks on another advance to the rear.
  22. BROAD IMPROVEMENT FOR STERLING MPC member sets the ball rolling with talk of higher UK interest rates. Commodity currencies hit by tighter monetary policy in China. After a day's hesitation in the vicinity of Monday's $1.73 starting point the pound set off higher. It made back two thirds of the previous week's losses to open in London this morning at $1.77. Sterling had a good week on almost every front. On the rare occasions it failed to make progress - and only the yen springs to mind - it was steady. There was not universal support in every case to start with but by Tuesday there was wind in every one of sterling's sails. The pound owed its uncharacteristic advance to the Bank of England, specifically to Andrew Sentance, a member of the Monetary Policy Committee. He told The Guardian newspaper that 'Threadneedle Street has done enough to lift Britain out of its deepest post-war slump and will need to consider raising interest rates this year if a recovering economy poses a threat to inflation.' In his opinion the sixth consecutive quarter of falling output in the third quarter of 2009 presented 'an excessively downbeat' picture of the UK economy and he downplayed the risk of a double-dip recession. That argument received corroboration the following day. The National Institute for Economic and Social Research ('Britain's longest established independent economic research institute' according to its own blurb) reckons the economy grew by +0.3% in the fourth quarter, contracting by -4.8% in calendar 2009. That last figure was given added punch by simultaneous news that Germany's economy shrank by -5.0% on the year. Although the NIESR is not responsible for the 'official' figures investors were happy to accept that the UK economy had finally returned to growth and they clung to that upbeat mood for the rest of the week. The week's highlight for the Australian dollar came on Thursday when it picked up a quick cent on the back of another strong employment report. Australia added a net 35.2k new jobs in December after an upwardly-revised 32.4k in November. The unemployment rate went down by a tick to 5.5%. But it was not the economic data or any domestic news that most affected the Aussie last week. On Tuesday the People's Bank of China - the central bank - announced that it was increasing the amount of reserves that commercial banks would have to post with it. This tightening of monetary policy was apparently aimed at dampening a surge in domestic bank lending. Investors feared it would also put a brake on economic activity, not just in China but also in the rest of the world. All the commodity and emerging market currencies were hurt by the news, including the Australian dollar. Sterling is off its 25-year lows but only by less than a handful of cents. As much as the AUD's rally looks overdone, to assume a reversal at this stage would be optimistic. Although it is likely the pound will be above its current level in six months' time that will be of no consequence to anyone with Aussie dollars to buy in the meantime. Buyers of the Australian dollar should hedge 50% of their requirement and be ready to cover the balance if the pound embarks on another advance to the rear.
  23. John from Moneycorp

    Australian Dollar weekly update

    The likelihood of a defeat for Labour is positive for the pound. Sterling touches a 25-year low against the AUD. Last week cost sterling the six Australian cents between $1.79 and $1.73. After a brief hesitation on Monday the pound set off lower, slowing its descent on Thursday at $1.73 and bouncing to $1.75. Friday brought another retreat and it touched a 25-year low early this morning before opening in London at $1.73. The UK economy delivered some decently positive data. Two purchasing managers' indices, one for the manufacturing sector, the other for services, extended their progress into the 'expansion zone' above 50. The manufacturing PMI came in at 54.6, taking second place to the equivalent US measure. Services, with a score of 56.8, led the international field. The Halifax house price index added 1% in December, putting it 1.1% higher than it was at the end of 2008. Factory gate prices went up by 3.5% last year, squeezing manufacturers who had to cope with costs rising twice as quickly over the same period. But it was not the economic data that shaped sterling's performance, it was politics. News of an attempt to oust prime minister Brown sent the pound lower; confirmation that the coup had failed sent it back up again. Investors believe that a solution to Britain's spending gap requires a change of government. As long as it looks as though Labour will be out of office by June they are inclined to be patient with sterling. And as long as Gordon Brown is leading his party into the general election they are confident that will happen. The Westpac Melbourne Institute survey of consumer sentiment fell by 4.5 percentage points in December. It was a much smaller fall than might have been expected after three consecutive interest rate increases from the Reserve Bank of Australia and an even greater rise in mortgage rates. Homeowners with a mortgage were understandably less confident but renters were more upbeat, perhaps because they were relieved not to have a mortgage. There was more positive news from November's building permits data. Permits rose by nearly 6% in November, a third up from a year earlier. Retail sales were 1.4% higher on the month and the trade deficit narrowed by almost a fifth. Taken together, it looks as though it is game on again for a fourth rate increase from the RBA next month. Sterling is off its 25-year lows but only by about a cent. As much as the AUD's rally looks overdone, to assume a reversal at this stage would be optimistic. Although it is likely the pound will be above its current level in six months' time that will be of no consequence to anyone with Aussie dollars to buy in the meantime. Buyers of the Australian dollar should hedge at least 75% of their requirement and be ready to cover the balance if the pound embarks on another advance to the rear.
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