Category Archives: AUD
Pound sees tentative rises for buying Euros and Dollars ahead of the thinner trading of the Christmas period (Joshua Privett)
Buying Euro, USD and Australian Dollar exchange rates have shown a noticeable uptake ahead of the Christmas period with rates above the 1.19 level on GBP/EUR, and above 1.70 on GBP/AUD being realized ahead of markets closing for the weekend.
The gains against the Euro and Australian Dollar in particular this week were due to a lower demand for these currencies which sucked away some of their recent, and frankly over-inflated, value. The clear driving force behind this movement is attributed to the historic rise in interest rates in the US, only its second time the FED have been do so since the financial crisis.
The USD/EUR currency pairing is the most heavily traded in the world – frankly because they are the two most widely used currencies globally. So as a rule of thumb, due to the large amounts of transfers and exchanges concentrated between the pair, when one of the two currencies suddenly gets a large boost in demand, as we saw this week, the other loses value through a corresponding slackening in demand. This is why GBP/EUR briefly managed to maintain its vantage point above the 1.19 level.
The interest rate on the Australian Dollar is at record lows but still much higher than elsewhere at 1.5%, compared to the UK’s at 0.25% as an unfortunate example. However, it is traditionally seen as an unstable currency due to its links to the commodities market, so when you have a safe-haven currency which raises its base interest rate rate, investors like to opt for this safer option, and the sell-off of Aussies for US Dollars is why USD/AUD gained today, as well as GBP/AUD – tipping over the 1.70 level for the second time this week.
Moving forward however, Euro and Dollar buyers have the phenomenon of profit taking to deal with as unusual end of year market forces take hold of exchange rates over the next few weeks.
At the close of the year, and what a year it has been, traders have to consolidate their profits in a stable currency for the rough 2-week period when they are away from their desks. This protects their capital from any adverse movements in what are normally ‘safe-haven’ currencies, so that when they come back to the desks the amount of capital they are managing hasn’t been worryingly eaten into. Of course the Pound is anything but stable at the moment and will likely suffer in the sell-off that ensues.
As such anyone with a buying Euro or Dollar requirement may be wise to move sooner rather than later to avoid the hefty amount of risk which should be piled onto Sterling in the very near term.
Since Trump became President in November, Euro buyers have gained over 11 cents in the marketplace for GBP/EUR and 10 cents on GBP/AUD. Meaning that in real terms on a £100,000 transfer buyers have gained an additional €11,000 or $10,000 in the space of 6 weeks. Understandably, the popular option at the moment is to consolidate those gains.
The turn of the New Year has many forks in the UK and therefore the Pound between January and March which are difficult to account for ahead of time, and markets will be factoring this in to the price of Sterling moving forward which could end up being expensive for anyone with a planned Euro or Dollar based obligation to meet in the New Year.
Sterling buyers of course may consider the opposite and play the currency markets by ear as we edge closer to the Christmas period to try at catch the market at any peaks which emerge.
If you are planning to make a currency exchange involving the Pound and a foreign currency, it’s well be worth your time getting in contact with me on email@example.com over the weekend in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages.
I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on a prospective transfer.
Sterling exchange rates are currently sat around a number of key levels which we may see broken through over the course of trading next week.
We have the Pound sat near 1.20 against the Euro, 1.25 against the Dollar, 1.70 against the Australian Dollar and 1.80 against the New Zealand Dollar.
Economic data for the U.K still continues to be solid post referendum and although there is the potential banana skin of article 50 and the supreme court decision hanging over the head of the Pound it does appear that the Pound is creeping back into fashion.
All 9 members of the Bank of England voted in favour of no change to interest rates on Thursday and I personally feel that the only thing holding the Pound back from being a great deal stronger is the uncertainty hanging over its head over the supreme court issue. This has the potential to knock the Pound back down again so anyone looking to exchange currency in the near term may wish to protect themselves from being caught out.
In my opinion I would not be surprised to see Sterling have a good week next week, we have thinner trading levels during the festive season so markets can move a little more than normal and i cannot see anything too negative hitting the Pound in the next week or so of trading.
If you are looking to carry out a currency exchange in the coming days, weeks or months ahead then here at Pound Sterling Forecast we can help you get both better exchange rates and an exceedingly high level of customer service too.
You are welcome to contact me (Daniel Wright) the creator of this site 7 years ago on firstname.lastname@example.org and i will be more than happy to contact you and deal with you personally.
Rollercoaster day for Sterling points to heavy ceiling for buying Euro and Dollar exchange rates (Joshua Privett)
Today buying Euro rates breached fresh 5 month highs in addition to more attractive levels for Australian Dollar buyers following the historic interest rate decision last night across the Atlantic in the US.
This was only their second rise in interest rates in over a decade. In the world’s largest economy, there was certainly going to be financial ripples as a result.
The obvious and direct result was that for anyone holding Sterling the Dollar become more expensive following the rate hike announcement.
But why did the Euro and Austrlian Dollar take a bit of a dive?
The USD/EUR currency pairing is the most heavily traded in the world – frankly because they are the two most widely used currencies globally. So as a rule of thumb, due to the large amounts of transactions concentrated between the two, when one of the two currencies suddenly gets a large boost in demand, as we saw today, the other loses value through decreased demand. This is why GBP/EUR briefly breached 1.20 earlier today as a secondary effect of the hike.
The gains against the Australian Dollar similarly were due to a lower demand for AUD which sucked away some of its recent, and frankly over-inflated, value. The interest rate on the Australian Dollar is at record lows but still much higher than elsewhere at 1.5%, compared to the UK’s at 0.25% for example. However, it is traditionally seen as an unstable currency, so when you have a safe-haven currency which raises its base rate, investors like to opt for this safer option, and the sell-off of Aussies for US Dollars is why USD/AUD gained today, as well as GBP/AUD.
However, markets moved back sharply in the afternoon following this move, with GBP/EUR almost losing a full cent as an example.
It seems markets are worried the recent improvements on Sterling will not carry through the volatile end of year trading period. At the end of the year traders and companies wind down their positions in order to consolidate their profits in a stable currency to avoid coming back to their desks in January and finding outside forces have eaten away some of its value.
Of course the Pound is seen as anything but stable at the moment. So the Pound seems set to lose out to major safe havens such as the Dollar, Swiss Franc, and potentially the Euro, however, more exotic currencies should still see it hold its own.
As such anyone with a buying Euro and US Dollar requirement may be wise to move sooner rather than later to avoid the hefty amount of risk which should be piled onto Sterling in the very near term.
Sterling buyers, of course may consider the opposite and play the currency markets by ear as we edge closer to the Christmas period to try at catch the market at any peaks which emerge.
I am well positioned to help anyone with a Sterling based currency requirement manage their exposure to the markets in the run-up to the new year and beyond in order to maximise your currency return in this volatile marketplace.
Contact me overnight on email@example.com to discuss the particulars of your transfer. I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on an upcoming transfer.
You can also contact me on 01494 787 478, and simply as the reception team for Joshua (me) and they will put you through to my line.
So another referendum is due to happen this weekend, this time over in Italy. Unlike the recent one in the U.K this is not a vote to leave the EU but a vote on constitutional reform.
This is extremely key as it may result in another heavy bout of uncertainty for Italy should the vote got the wrong way for Prime Minister Matteo Renzi, who has already warned that should the vote go against him and stop him from making certain changes that he feels he need to make then he would be looking to step down.
We already have various economic issues for Italy, most notably the banks who appear to be struggling and walking a bit of a tightrope, so should we then see huge political uncertainty added to Italian woes then the Euro may have a bad start to next week and you may potentially see GBP/EUR exchange rates go above 1.20 again in trading early next week.
Considering exchange rates against the Euro were lingering around the 1.10 mark merely a few weeks ago, anyone looking to buy Euros must be looking at the markets with a small smirk on their face as their pending purchase has got a lot cheaper recently.
Sunday night/Monday morning will be the next point of interest for anyone with a Euro interest and with so many other large decisions pending within Europe over the next few months I firmly believe the next 12 months are going to be extremely testing for the Euro.
We cannot forget there is also an election in Austria this weekend too with the far right party holding a great chance of success, causing more issues politically within the area.
All of these referendums and elections will impact all major currencies as we will see alterations in global attitude to risk, so the perceived ‘riskier’ currencies such as the AUD, NZD and ZAR may lose strength and those that are perceived as safer havens may gain ground if results cause uncertainty.
If you have any currency to exchange, no matter where you are based then we can help you out here. Should you wish to have a friendly, proactive and experienced broker on your side then we always welcome new clients to get in touch. I have personally been assisting clients moving money overseas and bringing money back for nearly 10 years so you can be confident that your transaction will be dealt with smoothly, securely and at the best rate of exchange.
Feel free to email me (Daniel Wright) on firstname.lastname@example.org should you be in this position and I will be more than happy to contact you personally. I look forward to speaking with you.
It was another volatile day for Sterling yesterday, with the Pound spiking up to a high of 1.1956, before retracting back towards 1.18 by close of European trading.
The Pound received another welcome boost following apparent comments made by Boris Johnson, regarding the free movement of people within the UK following our upcoming Brexit. This immediately gave the Pound market support, with GBP/EUR rates spiking off the back of it. Johnson was quick to speak out against this and claimed he had in fact never made the statement and the Pound lost value as quickly as it had gained it.
There were further comments made by Brexit secretary who clarified the government’s stance to some extent, by claiming the UK would consider contributing to the EU budget in order to guarantee the best possible access for goods and services to Europe. This more official statement is likely to help support the Pound over the coming days but whether it is enough to push GBP/EUR rates back towards the 1.20 mark is unclear.
Yesterday’s rates were the best in over three months for those clients holding GBP and I’m still of the opinion that clients should be looking at these short-term improvements as a window of opportunity. I’m still not convinced that any further Sterling strength will be sustainable under current market conditions, with so much uncertainty still engulfing the UK economy. We still have no clear picture of how we will facilitate our Brexit and with the high court ruling in regards to the triggering of Article 50 still to be ratified by the Supreme Court, who knows what the state of play will be, come the start of 2017.
Sterling has gained over 4 cents in the past few weeks, which on a £100,000 GBP/EUR exchange would be the equivalent of an additional 4000 EUR and considering how fragile the UK economy remains in the eyes of investors, this could the opportunity clients have been waiting for.
For the more risk adverse this month’s Italian referendum could put additional pressure of the Eurozone economy. If the Italian public vote NO to the reforms then current Italian Prime Minister Matteo Renzi is likely to step down, which could pave the way for the far right party to gain support. This would increase the likelihood of a another referendum on Italy’s future participation in the EU and the EUR could come under pressure as a result.
If you have an upcoming GBP currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.
If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on email@example.com