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John From Moneycorp

The Pound vs Australian dollar

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The Australian dollar continues to weaken against the pound.

 

Why is the Australian dollar on a downward spiral at the moment?

Comments from Reserve Bank Governor Glenn Stevens saying Australian dollar remains "uncomfortably high".

 

News from the US - meeting minutes revealed US Federal Reserve policymakers expect to begin tapering economic stimulus ‘in coming months’.

 

China - disappointing manufacturing data released. China is Australia’s largest trade partner so any news like this can impact the Aussie dollar.

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is this good for us exchanging the pound to the dollar or is it bad ?

 

Yes, the exchange rate has improved if you are sending money to Australia.

 

If you are transferring your pounds into Australian dollars this is good - means you are getting more dollars for your pounds because the exchange rate is at a higher level.

 

Thanks

 

John

Edited by John From Moneycorp

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Australia's cricket team had a far better week than its currency. The Aussie dollar was by far the worst performer, losing three cents to the euro, five cents to the US dollar and six to sterling.

 

With no useful Australian economic data to guide them, investors had to rely on the central bankers to give them direction. They got plenty, from the minutes of policy meetings at the Reserve Bank of Australia and the US Federal Reserve and from the mouth of RBA Governor Glen Stevens. The Federal Reserve offered a reminder that its money-printing stimulus programme would begin to wind down "in coming months", thus turning off the money tap that has been so helpful to the Aussie. Governor Stevens said he had "an open mind" about using intervention to weaken his currency, suggesting that the RBA might actually go ahead with it.

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The Australian dollar is still under pressure against the pound – this is good news for those transferring money from the UK to Australia.

 

One of the main reasons for this is after the Reserve Bank of Australia (RBA) kept its Cash Rate benchmark unchanged at 2.5% - further to the announcement, the RBA said in their statement that "the Australian dollar... is still uncomfortably high".

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Confidence in the UK’s economic recovery gathered momentum today as the Purchasing Managers Index (PMI) – focusing on activity levels within the construction sector in the UK – hit its fastest pace of growth since August 2007. Residential construction drove the surge with November’s survey result at 62.6, up from Octobers 59.4 (any figure above 50 indicates expansion).

The previous day’s PMI release from UK manufacturers had already given sterling a boost, having seen its index climb to 58.4, representing the highest level since February 2011.

Tomorrow sees the turn of the services sector, which will likely hold more sway of the pounds performance.

Sterling’s continued recent strength has seen it pass through a number of significant levels and a 3 year high against the Australian dollar.

It is certainly worth looking at any currency requirements you have on the back of these movements – if you are sending money to or from Australia, you can visit the Poms in Oz currency zone for more information - http://moneytransfer.pomsinoz.com/save-money-with-moneycorp.html

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The latest Australian dollar review is below – thanks

 

Life was not as difficult for the Australian dollar as it had been the previous week but it was no success story. The Aussie lost half a cent to sterling. Half a cent to the US dollar and two cents to the euro.

 

Some of the Australian economic data were decent enough. Retail sales were up by a monthly 0.5% in November. Activity in the construction sector grew more quickly and in the services sector it shrank more slowly. Companies' pre-tax profits averaged 3.9% in the third quarter, up from 0.4% in the previous three months.

 

But the figures for third quarter gross domestic product were disappointing. Quarterly growth slowed to 0.6% when it should have accelerated to 0.8%. As usual, the Reserve Bank of Australia was the Aussie's biggest handicap. The RBA said in its monthly statement that "the Australian dollar... is still uncomfortably high".

Edited by John From Moneycorp

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Hi John,

 

I'm about to make a fairly large transfer from pounds to dollars, what is your view on the rate in the next 2 weeks and in the longer term?

 

I'm wondering if I should be holding back some of this transfer, as the dollar seems to be going down in value.

 

Chris

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Hi Chris

 

Over the past few weeks, the pound has been much stronger against the Australian dollar – overnight, the AUD has slightly strengthened.

 

Many things affect exchange rates so it is tough to predict what will happen next. In relation to your upcoming money transfer, I would recommend speaking with a Moneycorp Account Manager - you can then access expert guidance on the Australian dollar.

 

They will discuss with you, in detail, the amounts you are looking to transfer and help you to make your currency transfer(s) at the best time.

 

Many thanks

 

John

Edited by John From Moneycorp

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Latest Aussie dollar update is below - thanks.

 

A bad week for the Aussie saw it relegated to the bottom of the major currency league. It lost two cents to the pound, a cent and a quarter to the US dollar and a cent and three quarters to the euro.

 

The Australian economic statistics were not as awful as the dollar's decline suggested but they were not great. Mortgage lending continued to rise. Business and consumer confidence faded slightly. A 21k increase in employment and a swing from part-time to full-time working was spoiled by a rise in the rate of unemployment to 5.8%.

 

But the Reserve Bank of Australia was at it again. Governor Glenn Stevens continued his crusade to weaken the currency, this time telling the Australian Financial Review that he would like to see the Aussie closer to 85 US cents, 5% below its level at the time.

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Latest Australian dollar review is below, thanks.

 

It was not a particularly difficult week for the Aussie but it could do no better than heading up a bunch of middle-ranking currencies that also included the Canadian dollar and the euro.

 

The Australian dollar was fractionally lower against the US dollar and fell by nearly a cent against the pound.

 

Reserve Bank of Australia Governor Glenn Stevens was banging the drum of an overvalued currency as usual but in his testimony to parliament's Standing Committee on Economics he appeared to distance himself from the view, saying "The Bank [rather than he himself] has described the exchange rate as 'uncomfortably high'".

 

But the main problems for the Aussie were strong employment data from Britain and the US Federal Reserve's surprise announcement that it would scale back its money-printing stimulus. The pound and the US dollar moved higher in response to the news and the Australian dollar was left behind with the other also-rans.

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Hi all, please find the latest Australian dollar update below – thanks.

 

Together with the other "commodity" dollars - the Loonie and the Kiwi - the Aussie lost ground to all the major currencies. It fell by a cent against the US dollar and by three and a quarter cents against sterling.

 

Inevitably the two-day holiday denied currencies much of the action they might otherwise have seen. A fractured three-day week, in which half the usual participants were off work and the other half wished they were, left scope for little more than random exchange rate movements.

 

There were no Australian economic data to offer them any guidance. Things should start to get going again on Thursday, when the manufacturing sector purchasing managers' index reading reminds investors that, with 2013 done and dusted, they have to start all over again.

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Happy New Year all - please find the monthly Australian dollar review below, thanks.

 

Having begun 2013 in fine fettle the Australian dollar turned tail in late spring and spent the rest of the year on the retreat. The process continued in December with the Aussie falling a further -4%. In that month alone it lost seven cents to sterling, six cents to the euro and two to the US dollar.

 

The Reserve Bank of Australia had a big hand in the process as Governor Glenn Stevens and his team continued their blitz of negativity about the "overvalued" currency. There was still no sign of any direct intervention by the RBA to sell the Aussie but investors could see no mileage in buying the currency in the face of such a PR onslaught.

 

By and large the disappointing Australian economic data tended to help the RBA in its pursuit of a weaker dollar. A revision to the figure for economic growth in the third quarter put it at less than before. The balance of trade was in deficit for a fourth consecutive month with imports rising as exports stagnated. Consumer confidence deteriorated. Any possible benefit from a 21k increase in employment and a big swing from part- to full-time working was wiped out by a rise in unemployment from 5.7% to 5.8%.

 

But to the surprise of many, the first two business days of the new year brought signs that investors may be reassessing their extreme bearishness about the Aussie. Together with the Japanese yen, which also had a rotten time in 2013, the Australian dollar rebounded sharply, picking up three cents in the space of just 24 hours. The significance of the swing remains uncertain: Does it represent a change of heart for the new year or was it simply bored traders returning from holiday and looking to spice up the FX market?

 

The answer might become clearer in the first full week of January, when most participants will be back at their desks and the market will be functioning more normally. But either way, the new-year bounce was a shot across the bows of anyone who thinks the Aussie is a one-way bet.

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Hi all, update below on this week, thanks.

 

After the Aussie's miraculous rally on the first working day of the new year a sense of reality has returned.

 

In the last week the Australian dollar lost two cents to the British pound and three quarters of a cent to the US dollar.

 

There was no particularly compelling news to provoke the retreat, just an underlying belief that last year's selling was broadly the right thing to do.

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Some positive news from the UK released today -
the UK unemployment rate has dropped to 7.1%, close to the point at which the Bank of England has said it will consider raising interest rates.

 

This positive news appears to have some impact john....AU$1.91 to the pound this morning.

 

In terms of the BoE raising interest rates, I thought there were a number of triggers they had said may trigger an interest rate rise and unemployment figures was one of them.

 

What's your view on how much weaker the Australian dollars going to get against Sterling over the next 6 - 12 months?

 

Lou

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In terms of what impacts the exchange rate, it is predominantly dependent on economic data released – this data could be from the UK, Australia and Asia (as China is a key trading nation for Australia).

 

Depending on what information comes out, this will impact the GBP/AUD rate.

 

For example, following disappointing employment data from down under released earlier this month, the Australian dollar weakened against the British pound. The unemployment rate remains at a four year high of 5.8%, and news that a further 22,600 jobs were lost during the month of December against expectations of a rise saw the Australian dollar come under further selling pressure in the foreign exchange markets – this employment news wasn’t widely expected therefore impacted the rate.

 

Thanks

 

John

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The Australian dollar is considerably stronger against the pound over the past few days.

 

Why?

 

This follows the Reserve Bank of Australia (RBA) announcement in which interest rates have been left unchanged at 2.5% - the RBA surprised some by dropping it’s bias towards easing rates.

 

The Aussie has also been boosted recently by a better-than-expected business survey which showed conditions nearly at a three-year high. Other data released has helped too including figures from the housing sector and prices for homes rising.

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The latest Australian dollar update is below, thanks.

The Australian and New Zealand dollars shared gold last week, both strengthening by about 2% against sterling, the US dollar and the Japanese yen which were fighting for the wooden spoon at the back of the field.

The Aussie added two US cents and went up by four cents against the pound. Three things helped the Australian dollar: an improvement in investors' optimism, an unusually moderate statement from the Reserve Bank of Australia and some decent economic data. The improvement in optimism lifted all emerging market and commodity-related currencies, including the Aussie.

The RBA statement omitted the usual comment about its currency's overvaluation, surprising investors. And they were surprised again by figures showing a strong 0.5% monthly increase in retail sales and a trade surplus in December when they had expected a deficit.

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Hi all

 

Relatively quiet week for the GBP/AUD exchange rate, a short review is below, thanks.

 

A dearth of Australian economic data meant a shortage of targets for investors that might have wanted to have a pop at the Aussie.

 

Unusually, the minutes of the Reserve Bank of Australia's policy-forming board meeting were positive for the currency. The tone of the document was guardedly optimistic and there was no mention of an overvalued currency.

 

The net effect was to leave the Aussie unchanged on the week against sterling and the US dollar.

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Please find a monthly review of the Australian dollar below - thanks.

 

An assessment of the Australian dollar's performance over the last "month" depends entirely upon which start and end dates are chosen. Between 1 February and 1 March the Aussie strengthened by a cent and a half against sterling; between 4 February (the date of the previous report) and 3 March it weakened by three and a half. By and large though, the level of the Aussie dollar at the time of writing is very similar to its position a month ago and at the beginning of the year. That is not to say it hasn't moved. In February the Australian dollar gained and lost seven cents - nearly 4% - against the pound. It strengthened by 4% against the US dollar and managed to hold onto most of that gain.

 

But, as they say in the tabloids, the Australian dollar is "troubled". The economic statistics over the last few weeks were more of a disappointment than a joy to investors and to the currency. The best of them showed Australian retail sales improving, the trade surplus widening as exports grew more quickly, business confidence improving and house prices rising. The worst indicated slowdowns in construction and manufacturing, a deterioration of consumer confidence, a rise in the unemployment rate to 6.0% and an unexpected slump in private sector capital investment.

 

Unfortunately for the Australian dollar the weaker data are the more recent, hence its rally in the first half of February and its relapse thereafter. The Reserve Bank of Australia holds its monthly policy meeting this week and investors are waiting to see what Governor Glenn Stevens will have to say about the economy. Few are holding their breath in anticipation of any change to the 2.5% benchmark interest rate, the Cash Rate, but most expect some comment about whether the economy is in good or bad order and what the RBA might do about it in time.

 

The situation in Ukraine is causing a great deal of concern among equity investors, and has dented the currencies not only of Russia and Ukraine itself but also of neighbouring Hungary. Until now though, there has not been the flight to quality that might have been expected. There has been no particular rush by investors to stock up with "safe" Japanese yen and Swiss francs, nor has there been any hurry to offload "risky" commodity-related currencies such as the antipodean dollars. That relaxed attitude might change of course, if the bullets start flying in Crimea.

 

But the Aussie remains exposed to the Chinese economy. Falling prices and fading Chinese demand for Australia's mineral exports pose a threat to the Australian dollar. In the coming month the Aussie will be at least as susceptible to the Chinese economic data as it will be to the domestic numbers.

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The Australian dollar has been boosted by stronger growth data in the fourth quarter of last year.

 

A government report showed gross domestic product climbed 0.8 per cent in the fourth quarter from the third and 2.8 per cent from the same quarter a year earlier.

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Hi all - weekly GBP/AUD review below, thanks

It was a much better week for the Australian dollar.

Although it was not quite top dog it was up there with the leaders, strengthening by a cent and a half against the US dollar and by two against sterling.

It was the improved Australian ecostats that did the trick: the figures for new home sales, manufacturing, building permits, retail sales, the trade surplus and economic growth were all better than expected.

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Hi everyone - the latest Pound v Australian dollar review is below, thanks.

The Australian dollar had a reasonably good week. Although it could not keep pace with the currency leaders - the Japanese yen and the NZ dollar - it took quarter of a cent off the US dollar and strengthened by a cent and a half against sterling.

The Aussie's upward progress was part of a wider effort by investors to ignore the precarious east-west dispute about Crimea. It also received a helping hand from some of the Australian ecostats. Consumer confidence did it no favours, falling for a third successive month, but the volatile employment change number did. The number of people in work there went up by more than 47k, nearly three times as many as forecast. The rise was accompanied by a 33k swing from part-time to full-time employment.

Whether they were impressed or simply relieved, investors responded by buying the Aussie.

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