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Discussion in 'Money & Finance' started by John From Moneycorp, Jan 23, 2013.

  1. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    Hi everyone

    This thread will provide updates on the pound and Australian dollar.
    A round up of the latest news from the past weak is below.

    Sterling has slumped to a six month low against the Australian dollar. The British pound has continued its New Year downward path against the ‘Aussie’ dollar.


    Why?


    There are mounting fears that the UK’s economy contracted during the 4th quarter of 2012. Clearly the risk of a return to recession enhances should the first three months of 2013 show no signs of improving growth prospects.


    Australia’s currency on the other hand has shaken off the recent unexpected rise in the nation’s unemployment rate. Global investors have instead remained more focused on Australia’s all important trade relationship with its largest partner China, who recently delivered an initial 4th quarter Gross Domestic Product result highlighting an annualised growth rate improvement to 7.9%.


    Australia’s growth prospects should be further enhanced as its second largest trade partner, Japan, looks to expand monetary stimulus measures certainly by 2014, but perhaps far sooner.

    This Friday’s first release of the UK’s Gross Domestic Product performance for the 4th quarter from the Office for National Statistics will help define the short to medium term direction of this currency pair.

     

  2. Moneycorp currency transfers
  3. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    Yet more bad news for the UK this morning – figures released show the UK economy shrank in the last 3 months of 2012.

    The Office for National Statistics (ONS) said the economy contracted 0.3% in the October to December quarter. The economy had grown by 0.9% in the previous quarter.

    There are worries that the UK economy could re-enter recession.
     
  4. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    The graph below shows the GBP/AUD exchange rate over the past month - as we can see, sterling has weakened considerably.

    [​IMG]
     
  5. lesleybruck

    lesleybruck Member

    We are moving around may time i hope it picks up soon
     
  6. Ktee

    Ktee Administrator

    John is it suppose to drop further?
     
  7. Ktee

    Ktee Administrator

    I hope it does for you hunny.
     
  8. lesleybruck

    lesleybruck Member

    Fingers crossed, we can always just transfer enough to last then leave the rest to wait for it to hopefully improve.
     
  9. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    A little review of the past week below.

    The Aussie and the pound are unchanged against one another. Sterling covered a range of one and a half Australian cents without ever really threatening to head off in either direction.

    Analysts cannot work out whether or not the RBA's 3% Cash Rate has further to fall but with it at that level for now, and with a triple-A sovereign credit rating, investors remain comfortable with the Aussie, overvalued or not.
     
  10. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    Some good news for the UK!

    The economy has avoided falling back into recession. The Office for National Statistics preliminary estimates have been released this morning for gross domestic product (GDP) – it showed the UK economy grew by 0.3% in the first three months of the year.
     
  11. lesleybruck

    lesleybruck Member

    Good lol lets hope rates improve
     
  12. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    The Australian dollar has weakened recently against the pound.

    This is mainly down to the following - poor data released in Australia (disappointing building approvals figures), plus US stocks and commodity prices have weakened.
     
  13. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    In an attempt to counter slowing growth in the country's mining sector, the RBA in Australia have cut its interest rate to a record low of 2.75% from 3%.

    Following this news, the Australian dollar is weaker.
     
  14. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    The Australian dollar has been much weaker against the pound recently - please see a review below.

    A bad week for the Aussie saw it lose a cent to the pound and nearly two to the US dollar. From its long term highs in March and April it has fallen by -7% against the pound.

    The -0.4% monthly fall in retail sales didn't help. Nor did the construction sector purchasing managers' index, which was down by four points at a seriously negative 35.2. The trade surplus looked good though, with exports up and imports down. Best of all was the 50k rise in employment and the downward tick in unemployment from 5.6% to 5.5%.

    The trump card on the downside, however, was the Reserve Bank of Australia's decision to cut its benchmark interest rate from 3% to 2.75%. The decisions itself was not a surprise but many investors had expected the move to come in June or July.

    The start of this thread mentions interest rate announcements can have an impact on the exchange rate and that is what has happened here - a decision taken, which took most by surprise, therefore we've seen a movement in the GBP/AUD rate.
     
  15. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    There has been a big shift in the GBP/AUD exchange rate with the Australian dollar weaker.

    The Aussie dollar has weakened recently due to the cut in interest rates in Australia along with some concerns about the Australian and Chinese economies -the strength of the US-dollar has also impacted the Aussie.
     
  16. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    The recent rout of the Australian dollar has continued after disappointing growth data for the first quarter of 2013 was published by the Australian Bureau of Statistics. The Australian economy expanded at a slower rate than expected between January and March this year building the case for another rate cut by the Reserve Bank of Australia.

    A strong economy, relatively high interest rates and robust demand for its natural resources from its main export partner China, had helped to underpin the strength in the Australian dollar in recent years; however these supporting factors are now beginning to recede. China is experiencing a slowdown of its own economy which will likely lead to a drop in demand for Australian exports.


    Sterling on the other hand has been buoyed by a round of improving economic data releases so far this week. First came news that UK’s manufacturers had reported their highest activity levels in 14 months, next came the construction sector with a surprising return to growth driven by residential building. The best was saved to last with the dominant UK services sector reporting a surge in activity, delivering its strongest reading since March 2012. With all three sectors now growing for the first time for a year there are clear signs that the UK recovery is gaining traction.

    It can be worth exploring the different options available to you when buying or selling Australian dollars – more information can be found here:
    http://moneytransfer.pomsinoz.com/various-ways-to-buy-currency.html

    Thanks

    John
     
  17. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    Latest review is below, thanks.

    There was nothing to choose between the Australian and New Zealand dollars. Both fell by more than 2% against sterling and by twice that much against the US dollar.

    A dearth of Australian economic data meant the Aussie had nothing with which to defend itself against the flow of negative sentiment towards all commodity-related and emerging-market currencies. When the US Federal Reserve chairman set out on Wednesday a road map to the wind-down of his $85bn-a-month quantitative easing programme he was not telling investors anything they did not already know but he made it all sound much more imminent and scary.

    The newly-and brightly-illuminated writing on the wall sent equity and bond prices lower and put the US dollar on an upward trajectory. The hardest-hit currencies were those that had gained most benefit from the Fed's QE largesse and had most to lose from its cessation.
     
  18. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    The Australian dollar has weakened against most major currencies after comments from the Reserve Bank of Australia Governor Glenn Stevens. In his statement, he said that the downward phase of the investment boom in the country is likely to pose significant challenges.

    He also cautioned about a ‘strong currency that still threatens many areas of economy’.

    These comments have led to a weaker Aussie dollar against the pound.
     
  19. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    The latest currency review is below, thanks.

    In a busy week the US dollar was the top performer, strengthening by one and a half cents against the Aussie and by three and a half against the pound. The Australian dollar was steady against the euro and the Japanese yen. The Australian dollar suffered a hit on Tuesday when the Reserve Bank of Australia kept its benchmark interest rate steady at 2.75% and reiterated that "the inflation outlook... may provide some scope for further easing." The comment should not have come as a surprise to investors but they didn't like it anyway.

    It suffered another on Friday when the US employment data came in much stronger than expected, increasing the likelihood that the US Federal Reserve would soon begin to wind down its quantitative easing programme.

    Although the Aussie lost ground to the US dollar on the news, the pound lost more.
     
  20. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    The latest Australian dollar review is below.

    Had it not been for the US dollar's even worse performance the Aussie would have found itself at the bottom of the pile last week. It lost more than a cent to sterling and collected less than a cent against the week's biggest loser.

    Investors continue to obsess about the US Federal Reserve, their white knuckles hooked around hair triggers. Last week it was the Fed chairman's promise of "highly-accommodative monetary policy for the foreseeable future" that got them moving, sending the US dollar south as quickly as it had risen seven days earlier. Every currency gained ground against the Greenback but the Aussie's pickings were meagre.

    Some 40% of Australia's exports go to China and the economy of that country is slowing. Investors fancy that reduced Chinese demand will continue to weigh on the Australia's own economy and its currency.

    The latest Reserve Bank of Australia minutes suggest that the Australian dollar was doing enough for now to stimulate the economy – the minutes also indicated a further interest rate cut is unlikely in the short term.
     
  21. John From Moneycorp

    John From Moneycorp Foreign Exchange Expert

    Hi All

    Please find this weeks currency update below

    A difficult but by no means disastrous week for the Aussie left it at the back end of the field. It lost half a cent to the pound and the US dollar.

    Wednesday was a difficult day for the Australian dollar. At roughly the same time the Australian consumer price index data showed inflation slowing to 2.4% and China's manufacturing sector purchasing managers' index fell by half a point to 47.7. The inflation number was bad for the Aussie because it made lower interest rates more likely. The Chinese PMI was bad because a slowdown in Chinese manufacturing means reduced demand for Australian minerals and energy exports from its biggest customer.

    Sterling's performance was tepid despite the UK economy expanding by 0.6% in the second quarter of the year. Though the figure was double that of the first quarter, it was exactly as investors had expected; because of that, they sold the pound.

    Moving into this week, the Aussie lost ground overnight taking the GBP/AUD back to the highs we saw a few weeks ago this is in reaction to Glenn Stephens (Governer of the RBA) speaking overnight, he said second-quarter inflation data suggests there’s still room to lower interest rates if required and that he wouldn’t be surprised if the currency dropped further.

    The Australian dollar dropped as traders added to bets the RBA will reduce the benchmark rate by a quarter percentage point at next week’s meeting, ​
     

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