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    Thread: The Pound vs Australian dollar


    1. #71

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      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.

    2. #72

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      Mid market rate hovering around 1.69 AUD to the pound at the moment which looks likes it's the highest it's been for nearly 5 years. Getting better for people on the way over here.

    3. #73

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      This should make it a bit easier for anyone coming with a few quid. We got 2.25 - 2.40 when we came in 2007, shame we went back to the UK and changed it back again. We are on count down now, less than two weeks till we fly out again so I have been watching closely. Still wont know what to do though in regards to changing money.
      Quote Originally Posted by Cerberus1 View Post
      Mid market rate hovering around 1.69 AUD to the pound at the moment which looks likes it's the highest it's been for nearly 5 years. Getting better for people on the way over here.
      Ktee likes this.

    4. #74

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      Just crept over the 1.70 hill and then rolled back a bit.

    5. #75

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      Please see a monthly review below on the Australian dollar – attention turns to the Reserve Bank of Australia and their interest rate decision tomorrow.

      July was another awful month for the Australian dollar. In June it came last among the ten most actively traded currencies and in July it was at the bottom of the table again. The losses last month were less severe though: In June the Aussie fell by 5% against the pound and by 5.5% against the euro while in July those declines were "only" 2.5% and 4%. Since the beginning of the year the Australian dollar has fallen by 9% against the pound and by 16.5% against the euro.

      In most countries the authorities would be devastated to see their currency trashed like that. But the Australian government and the Reserve Bank of Australia have maintained for ages that their dollar is too strong. Even after this year's fall they apparently still feel the same way. RBA governor Glenn Stevens said in late July "It would not be a major surprise if a further decline occurred over time." To help it on its way, the governor also hinted at an interest rate cut in the pipeline, which would further diminish the attraction of the AUD to investors.

      And the background for the Aussie dollar is still a difficult one. Nearly a third of Australia's exports - mainly iron ore and coal for making steel - go to China. Chinese demand has fallen as the recession and its after-shocks have led to dwindling demand for the export products that China builds with that steel. Falling demand for coal and iron ore means lower prices for them, so Australia is exporting less stuff and having to sell it more cheaply. That, in turn, means less demand for the Australian dollars that customers use to pay for the country's exports.

      It is not a new situation but it is one that continues to weigh on the Aussie dollar. The end of the mining boom means that Australia will need new industries to fill the economic gaps, not least the tax gap. In the next four years, taxes paid by companies to the government are expected to fall by A$10bn. That means either lower government spending or increased taxes elsewhere. The first of these will be a tax on bank deposits, which starts in January 2016.

      There is no consensus about what would be a "fair" value for the Australian dollar but there is general agreement - and not just in Canberra - that it is somewhat lower than its current level. From its highs four months ago the currency has fallen by 14% against the pound and by 22% against the euro. That might sound a lot but the Aussie still has a way to fall if (and it is "if") it is to return to its pre-global-financial-crisis levels.

    6. #76

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      The Reserve Bank of Australia cut its policy interest rate on Tuesday to an all-time low of 2.5%

      The Reserve Bank of Australia's (RBA) decision to cut its Cash Rate from 2.75% to 2.5% was widely anticipated – in their statement, the RBA's failure to hint at a subsequent cut, and the tone and sentiment of the comments from RBA governor Glenn Stevens was enough to make the Aussie dollar slightly stronger against most currencies.

    7. #77

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      The Australian dollar has strengthened after strong July trade numbers from China – the numbers were better than expected.

      China is Australia's main export market therefore any economic data released can affect the exchange rate.

    8. #78

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      The Australian dollar has strengthened following industrial output data released from China beat market expectations.

      Over the past week, recent economic news from China has boosted the Aussie dollar.

    9. #79

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      The latest Aussie dollar review is below - thanks

      The Aussie dollar was the top performer among the ten most-actively-traded currencies. It strengthened by nearly four cents against the pound and by five against the euro.

      The Australian economic statistics were adequate rather than spectacular. House prices were up by 5.1% in the year to June and unemployment was steady at 5.7%. Paradoxically it was an interest rate cut by the Reserve Bank of Australia that sent the currency higher. The Cash Rate reduction from 2.75% to 2.5% had been widely expected and the RBA indicated it had no plans for any further cuts.

      Sterling was unable to keep up with the rebounding Aussie but the UK news and numbers were positive for the pound. The services sector reported the quickest expansion since 2006 and manufacturing and industrial output both delivered healthy increases. The Bank of England's long-awaited "forward guidance" revealed that the Bank Rate would only stay low as long as inflation remained in check.

    10. #80

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      The main news coming up on Tuesday is the release of the RBA Monetary Policy Meeting Minutes.

      The minutes may provide an indication on strategy over further potential interest rate cuts in Australia.

     

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