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Guest Chelseadownunder

UK Pound v Aus Dollar

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    Europe is finally looking to be coming out of recession and it seems to be led by the UK. (This is not financial advice just a member of PIA personal comment)

     

    Im not sure where you are getting your information from? Europe remains a basket case with only UK and Ireland showing signs of recovery in fact both show signs of rapid recovery. France has now flat lined, Germany is well below expectations and there is no accounting for Spain, Italy and Portugal. Also Greece I guarantee will need a 3rd bail out shortly! I see the main issue being Europe has nothing which the rest of the world wants or needs any more other than generous social services. The philosophy of Europe is great as with left wing politics, however Europe can not afford to maintain their current path and significant change is required.

     

    With regards to interest rates, Mark Carney can not afford to put them up because it will send 1/2 UK back into recession or bankruptcy due to people being over leveraged with huge mortgages and credit card debts. A slight increase in interest will break these peoples current fragile financial affairs meaning inflation will become UK's biggest issue as the main tool (interest rates changes) for correcting inflation can not be used. George Osborne like him or hate him has a very hard job and expect to see more taxes against earnings being introduced to keep inflation under control however also expect to see the top band of taxes being reduced to 40% soon. I was amazed to see the 40% tax band is only £32,010.00 and next year will be £31,866.00 meaning more and more people end up in the 40% rate meaning a far greater take for the tax man.

     

    My opinion with the AU $ is that it will exceed the £1:$2 which is good news for Australian exporters as the currency has been too strong in the governments view. I guess the AU $ could not be reduced previously as it was seen as one of the safer currencies where nearly every other currency other than the BRIC countries were in free fall (ironic as now Brazil and India a suffering again although Russia and China remain strong). The UK £ is now strengthening against most currencies although the US $ is currently pumped up with stimulus however this will come to an end and maybe £1:$2 US maybe back on the cards? The other huge issue is the protection of the Renminbi by China. If this was able to find its own level globally then many of the worlds currencies especially the US $ would strengthen hugely.

     

    S

    Edited by srg73

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    Guest Chelseadownunder

    Happy New Year everyone.

    In the UK it is expected that rates will stay on hold this Thursday. If there was a surprise increase this could push the pound up v the A$ Dollar. We also have inflation news from the UK due soon also. $2 in the first quarter would be going some and would really depend on news out.

    I am also interested to see if the current good news from the UK continues. The Retail sector did look like it was coming off pretty hard on recent figures.(This is not financial advice just a member of PIA personal comment)

    Good luck on your big move Angus, Kate, Logan and Jacinta (8/1/2014)

    Edited by Chelseadownunder

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    Guest Chelseadownunder

    This following news today is likely to weaken the Aussie dollar and we have already witnessed a move on the GBP/AUD today.

    Australia's unemployment rate rose to the highest level in more than a decade, raising fresh doubts about the strength of the economy and underscoring the dilemma for the central bank over whether to cut interest rates further. The unemployment rate in January rose to 6% from 5.8% in December. Economists had expected an unemployment rate of 5.9%. Australia's jobless rate has been creeping up as thousands of workers in the once-booming resources sector have lost jobs over the past year as companies adjusted to lower commodity prices. More recently, the losses have spread to sectors such as auto manufacturing and the airline industry, hurt by fierce competition and a strong Australian dollar exchange rate.

    LONDON--A more than four-year low in housing for sale helped U.K. home prices to continue rising in January, according to a monthly survey Thursday. The combination of increased mortgage availability and a drop in the supply of housing for sale meant demand to purchase a property remained strong in the first month of 2014.

    Positives in the UK and negatives in Australia we may now surge on toward the $2 mark.

    I didnt think we would get there within this quarter but I think the chances have just increased. Surprises tend to move markets more.

    (This post is written as a member not a financial adviser and is in no way financial advice and shouldnt be taken as such more so a commentary)

    Edited by Chelseadownunder

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    Guest Chelseadownunder

    I felt the following may help add to the commentary of the GBP/AU$, the following is a comment by Shane Oliver leading economist who regularly appears on TV for financial comments.....

    [TABLE=width: 100%]

    [TR]

    [TD=bgcolor: #0075ad]The Australian dollar - still more to fall[/TD]

    [/TR]

    [TR]

    [TD=class: border-inner-bottom, bgcolor: #0075ad]Shane Oliver, Head of Investment Strategy and Chief Economist.

     

    Key points:

    • The rising tide in favour of the $A has well and truly reversed with further downside likely in the years ahead, particularly against the $US and Euro.
    • The commodity price boom has faded in response to a moderation in Chinese growth as commodity supply increases, the US is slowing its quantitative easing program and rate cuts have reduced the attractiveness of the $A all at a time that it remains above levels that offset relatively high costs and prices in Australia. So notwithstanding occasional bounces like that seen over the last few days, expect the $A to fall to around $US0.80 in the next few years.
    • For Australian based investors, this means less need to hedge global exposures back to Australian dollars.

    [/TD]

    [/TR]

    [/TABLE]

     

    The above should be taken as just a commentary and not Financial Advice.

    Edited by Chelseadownunder

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    Guest Chelseadownunder

    Hi Guys,

    I am seeing some really positive news from the UK for the next 3-6 months. Manufacturing and Construction is looking really good and RPI/CPI are beating expectations. There are murmurings about a possible interest rate rise. Support has been seen for the Pound/dollar is around 1.81 and then 1.78.

    It may be we see a push now towards 1.90 and beyond. It will be affected also by Australian news which seems mixed.

     

    The above should be taken as just a commentary of a member of the site and not Financial Advice.

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    Guest Chelseadownunder

    Hi All,

    Its great to see the pound rally now as the Scottish Vote looks like it will be No and we are up around 1.84.

    Steve

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