Pounds To Australian Dollars

Australian Dollar Outlook steady for 2011

2010-12-20T04:04:00.000-08:00

THE Australian dollar has ended lower as investors dumped risk assets following a slump on Asian equity markets.

At 5pm australian dollar exchange rate was trading at 98.79 US cents, down from Friday's close of 99.00 cents. Shortly after, the local unit traded between 98.65 US cents and 98.90 cents. UBS interest rate strategist Matthew Johnson said the australian currency moved sideways during domestic trade. "The australian currency is trading in such a small range due to low levels of liquidity," Mr Johnson said.

He said there had been a slight move towards safe haven assets due to increased tensions on the Korean peninsula and falls in equities. The Australian share market finished the day weaker after sagging bank stocks outweighed gains to the energy sector.

The Australian bond market ended firmer after investors moving into safe haven assets as military tensions on the Korean peninsula increased.

The Australian dollar closed at 82.86 yen, down from 83.18 on Friday and at 75.07 euro cents from 74.56 previously. At 4.30pm AEDT on the ASX 24, the March 10-year bond futures contract was at 94.430 (implying a yield of 5.570 per cent), up from Friday's close of 94.365 (5.635 per cent). The March three-year bond futures contract was at 94.730 (5.270 per cent), up from 95.700 (4.300 per cent).

Mr Johnson said Australian bonds were relatively flat after a rally in US Treasuries. "Weaker equities have caused US Treasuries to rally and Australian bonds have followed suit," Mr Johnson said.

"The ten years have been stronger than the three years, given the offshore factors. There's a little more tension on the Korean peninsula, so there's been a move away from risk on the equity market."

Mr Johnson said bonds would continue to trade in a narrow range in the lead-up to Christmas. "At this time of the year you'd expect the thin trading volumes."

The 90-day bank bill closed at 4.980 per cent down from 5.020, while the 180-day bank bill closed at 5.170, down from 5.210.

At 4pm AEDT, the RBA's trade weighted index was unchanged from Friday's close of 74.8.

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2010-12-07T03:03:00.000-08:00

Australian Interest rates will stay steady for at least another two months after the
Reserve Bank today kept the official rate on hold at 4.75 per cent. The decision
was widely expected after the RBA’s surprise move last month prompted the big
banks to lift mortgage rates well beyond the official 25 basis-point rise. HSBC
economist Paul Bloxham said last week that today’s decision was “almost a fait
accompli” after mortgage rates rose by about 40 basis-points in November, “which
is plenty of tightening for now”. After today’s board meeting, the RBA will not
meet again until February,

the Herald Sun reports.
In a statement detailing today's rate decision, RBA governor Glenn Stevens said there continued to be "a degree of caution" in consumer spending and borrowing, which has led to "a noticeable increase" in the household saving rate. "Following the board's decision last month to lift the cash rate, and the subsequent increases by financial institutions, lending rates in the economy are now a little above average," Mr Stevens said. "The board views this setting of monetary policy as appropriate for the economic outlook."

A 25 basis point increase to the official rate would have added about $50 a month to a $300,000, 25-year home loan, according to research company Canstar Cannex. All 15 economists surveyed earlier by AAP forecasted the central bank would leave the overnight cash rate at 4.75 per cent. The meeting followed weak economic data last week showing the Australian economy grew 0.2 per cent in the September quarter for an annual pace of 2.7 per cent and retail trade fell 1.1
per cent in October. "The 'super-sizing' by the commercial banks all but liminated the need to do much more near term," JP Morgan chief economist Stephen Walters said yesterday. Last week's data also showed tepid economic growth in the September quarter and an unexpectedly weak result for October retail sales, giving the (RBA) more flexibility on its next move. The jump in
mortgage rates, aside from the uproar from customers and politicians of all stripes, has caused a change of behaviour among borrowers.

According to Mortgage Choice data, almost 11 per cent of all home loans approved in November were fixed rate, compared with 7.7 per cent in October, as borrowers sought certainty in their
monthly repayments. Such mortgages accounted for less than one per cent of approvals in January. Another broker, Loan Market, has also faced a flood of inquiries from people wanting to reduce their home loan by moving to a smaller house. Treasurer Wayne Swan is expected to announce a suite of measures this week to encourage more banking competition by promoting smaller banks, building societies and credit unions.

For the full story please visit www.news.com.au

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Overseas Money Transfers

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2010-11-04T05:24:00.000-07:00

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2010-11-04T04:46:00.000-07:00

THE Australian dollar has reached another post-float 28-year high against the US dollar.

The dollar exchange rate reached its record high of 100.57 US cents in early trade today, another post-float 28-year high.

Australia's push above parity with the US dollar rate will have a mixed impact on the economy, Prime Minister Julia Gillard said.

"This is a mixed thing. It's good for some industries and bad for others,'' Ms Gillard said on the Nine Network.

"If you rely on imported components to do what you do, then it makes a good difference. But if you're competing for things like tourism, international education, it makes it really tough."

Buy US dollar slid overnight, briefly touching a nine-month low against the best euro exchange rate, after the Federal Reserve said it would spend US$601 billion to buy US government bonds in an effort to boost the economy.

Investors had expected the Fed's action for months, since Ben Bernanke, the central bank's head, hinted at the move in a speech in late August.

To Read more please visit www.news.com.au

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Australian Dollar Outlook

2010-10-25T15:24:00.000-07:00

THE Australian dollar exchange rate is expected to stay above 90 US cents throughout 2011 as the Reserve Bank continues to raise interest rates.

Australia's resource sector is also tipped to prop up the domestic economy, replacing stimulus spending as a key driver of growth.

The "high-flying" Australian dollar should stay well supported for a while longer, Access Economics said in its latest Business Outlook report.

The forecaster's director Chris Richardson said he envisaged the Australian dollar rate staying above 90 US cents throughout 2011, but not going much beyond parity.

"We face roughly a year with the dollar being strong," he told AAP.

The Reserve Bank is also tipped to keep raising interest rates next year as wage costs put pressure on inflation.

"Australia's economy continues to dance to the beat of a different drum, and continuing good economic news and the coming inflection in inflation are likely to see the Reserve Bank raising rates again," the report said.

The cash rate was tipped to climb from 4.5 per cent at present to 6 per cent by the end of 2011, with the central bank tipped to raise the cash rate at least once before Christmas.

The report said business investment in the resources sector would be "absolutely vital" to Australia's economic recovery, replacing public stimulus spending as a growth driver.

"We need to see the likes of the Gorgon project and other resource spending take the baton of growth from the construction of school halls," it said.

This would offset sluggishness in the retail and housing construction sectors, the report said.

By the end of next year, Australia's terms of trade was expected to fall as a greater global supply of resources caused commodity prices to "return to earth".

The central banks of other advanced nations, including the US, would also start to lift interest rates.

This would diminish Australia's interest rate differential with other advanced economies and see the local currency fall off its highs, Mr Richardson said.

When it came to politics, Access Economics had misgivings about a minority government offering "a bucket of bribes" to the regions and promoting populist economic policies.

"They're not going to risk political capital going for the right thing," Mr Richardson said.

He cited shadow treasurer Joe Hockey's call to regulate bank interest rates as an example of irresponsible politics, and urged the government to refrain from erecting new trade barriers, subsidising old industries and reaching for regulation without checking if its costs outweighed benefits.

"And don't chase the chimera of 'supporting jobs' in an economy that is already close to full employment," Access said.

Access Economics is expecting consumer price index data for the September quarter to show an annual growth of 2.9 per cent and a quarterly pace of 0.75 per cent, when the figures are released tomorrow.

To Read more please visit

www.news.com.au

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Australian dollar's impact on company profits

2010-07-19T04:05:00.000-07:00

THE Australian dollar's impact on company profits should be a mixed bag this reporting season.

On one hand, a more than US Dollar 8c decline against the greenback after the dollar punched above US94c in November would have come as a welcome relief to businesses with big US exposures, The Australian reported.

"If anything, that is going to provide a modest boost to earnings," said UBS chief strategist David Cassidy.

But its stellar march forward against the euro is likely to have dented the profitability of companies with operations in Europe. "For companies with big euro rate exposure, that is going to be a pretty clear headwind," Mr Cassidy said.

Last financial year was a roller-coaster 12 months for the Aussie Dollar. After breaking through US94c in November, it was sold down heavily in May to a low of US80.65c, as concerns over Europe's debt crisis intensified.

Fat Prophets analyst Colin Whitehead said the dip would have benefited exporters such as Foster's, which would have been able to compete more effectively on price. "Then you have the broader macro effect of tourism - during periods of Australian dollar weakness the tourism industry will benefit from more overseas visitors."

By the end of the financial year, the Australian dollar Rate had recovered more than 6 per cent to end the year at US85.53c, limiting its effect on local groups with US operations.

RBS equities strategist Greg Goodsell said he would be surprised if the dollar, against the greenback, was a big factor this reporting season.

"In the last 12 months it has averaged between US78c and US92c, so it has been in a reasonable range, whereas during the GFC it went down to the low 60s," he said.

He said Australian stocks generally did not take naked currency risk any more. "Most of them manage their exposures pretty well - they either put financial hedges in place if they have a significant degree of risk or do natural hedging, so if they have US dollar assets they will typically fund themselves in US dollars," Mr Goodsell said.

"Because of that, the currency has to move a long way to have a big impact on earnings results."

But Mr Cassidy said there could be some euro-related downgrades to watch for due to the dollar's strength against the euro exchange rate.

Last financial year, the dollar surged about 20 per cent against the euro, reflecting the differing outlooks for the Australian and euro-zone economies. "Obviously there are lots of moving parts as to how the business is actually going operationally, but companies like Amcor and Brambles do have big European operations," Mr Cassidy said.

To Read more please visit

www.news.com.au

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Australia does not have a speculative housing bubble

2010-05-18T02:41:00.000-07:00

THE Reserve Bank has warned lenders and borrowers to be prudent while giving an assurance that Australia does not have a speculative housing bubble on its hands.

Fears of a property bubble emerged after the Australian Bureau of Statistics house price index rose 20 per cent in the year to March.

But RBA head of financial stability Luci Ellis said Australian house prices have recovered their small decline from 2008 to post increases of between about 12 to 15 per cent over the past year in capital cities, depending on the measure.

Ms Ellis said recent data suggested Australia does "not have a credit-fuelled speculative boom on our hands".

"It would not be desirable for the current situation to turn into one," she said in a speech.

"It will therefore be important for lenders to remain prudent in their standards.

"It will be equally important for prospective borrowers to have realistic expectations, and not to rely on a hoped-for capital gain in order to service their debts."

She told a residential property conference housing prices have been under upward pressure in Australia, with most short-term drivers coming from the demand side following the increased first home-buyers grant, low interest rates and lower than expected unemployment.

"The nature of the demand shock Australia faces means that it would be helpful if more of that demand could be accommodated with extra homes for occupation, instead of by higher prices," she said.

"Some of that pick-up in construction does seem to be happening."

She said the supply of housing was always going to be quite "sluggish".

"But whatever the causes, the ability to add to supply is falling short of this higher rate of population growth, despite some pick-up recently," she said.

"Naturally that is putting upward pressure on housing prices."

Ms Ellis said it would be "desirable" for the supply of new dwellings to become more flexible than it had been to date because extra people need somewhere to live, and both house prices and rents could rise.

The more that housing prices rise, the more some people might feel they must stretch their finances to buy a home, she said.

Another concern was that if too much of the response to faster population growth comes as faster growth in housing prices, this could be "built into people's expectations".

"If price expectations become over-optimistic and encourage too much investor demand, the result could be disappointment, or worse," she said.

She also said fewer households had bought their homes without debt.

Across the mortgage market, lending standards were now a little tighter than they were a few years ago and the fraction of low documentation loans was now lower than it was two years ago for both owner occupiers and investors, she said.

As well, only a minority of recent home loan borrowers started with a loan to value ratio above 90 per cent, she said.

Ms Ellis also revealed the RBA has been carefully watching lending standards in the important first-home buyer market segment.

"First-home buyers have long faced greater risk than more established home owners who have more equity in their home," she said.

"But as far as the data allow us to tell, recent new loans to first-home buyers look quite like those made to previous cohorts of first-home buyers."

To Read more please visit

www.news.com.au

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Australian Dollar will continue to strengthen against the euro and the pound.

2010-04-09T02:19:00.000-07:00

Parity talk time again for the Aussie

Almost two years since the Australian dollar touched generation-high levels against the
US dollar rate at almost 98 US cents, debate over whether and when the Aussie dollar will exceed the greenback in value is back.

The Reserve Bank's move this week to raise its cash rate again sparked fresh impetus to the Aussie dollar's rise. The central bank's signal that more rate rises are ahead also added to the currency's relative allure.

And economists are dusting off the history books to assess the currency's rise against other
currencies, particularly those in Europe. The Aussie dollar remains at record levels versus the euro, where it's trading just below 70 euro cents, while it hasn't bought this many UK pence (currently about 61) in 25 years.

AMP Investor chief economist Shane Oliver believes the relative strength of Australia's resource-based economy will push the Aussie dollar, currently buying 92.9 US cents, to parity against the greenback before the year is out.

Indeed, Mr Oliver says the local dollar's recent rise is bringing it back into line with its longer-term averages. While it's traded at less than par with the US dollar since its float in 1983, Australia's dollar had been worth more than the greenback for the great bulk of the country's history, particularly during the era before the switch to a decimal currency in 1966.

''Back in 1901 the equivalent of one Australian dollar bought $US2.40 and for most of the last century the Australian dollar was above parity against the US dollar,'' Mr Oliver said, in a note to clients.

''It is likely the sub-parity period from the 1980s was the aberration for the Australian dollar and the improvement in Australia's relative fundamentals suggest it is likely the Australian dollar is going back above parity against the US dollar.''

The Aussie has risen 1.5 per cent in the past month alone against the US dollar, or 3.6 per cent since the beginning of the year, making it among the top five performers among major currencies during the period, according to Bloomberg data.

RBA outlook

Bolstering the local dollar's recent rise has been the Reserve Bank's series of five interest rate rises since October to 4.25 per cent. With the US Federal Reserve's lending rate remaining near zero, the gap between the two interest rates is the widest since 2008.

That gap may widen further, with financial markets betting on another four RBA interest rate rises over the coming year to prevent the economy expanding too fast. The unemployment rate now sits at 5.3 per cent, and may drop below 5 per cent before the end of 2010 - about half the current jobless rate in the US.

To be sure, at less than 93 US cents, the currency still has a fair way to go before parity is reached. Even so, NAB expects the Aussie dollar to trade at parity levels in the second and third quarters of this year, while overseas banks Nomura and Standard Chartered Bank are among those predicting parity by the final quarter of 2010. ANZ economist Amber Rabinov, though, forecasts the Australia dollar's rise will stall in the mid-90 US cent levels as worries resurface about the health of the global economic recovery.

''The continued depreciation of the euro versus the US dollar due to a lagging Euro zone recovery and sovereign credit concerns should cap gains in the Australian dollar,'' Ms Rabinov said.

Nonetheless, she said the Australian Dollar will continue to strengthen against the euro
and the pound. Other analysts are more pessimistic, though, seeing the Australian dollar
retreating over the year as investors grew skittish again about risk as troubles re-emerge in Europe, the US, and China.''I'm more a believer that the Aussie will end the year closer to 80 US cents rather than parity,'' said Arab Bank Australia Treasury Dealer David Scutt.

''We are only an economy of 22 million people and completely reliant upon the happenings offshore, a fact that many people have forgotten since the recovery process began.''

Mr Scutt said some countries, particularly in Europe, will struggle to meet their debt repayments, sapping the global appetite for currencies deemed to be relatively risky, such as the Australian dollar.

To Read more please visit

www.smh.com.au

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Australian Dollar Outlook improves as RBA leave Australian Interest Rates Unchanged

2010-02-16T05:36:00.000-08:00

Australian Dollar Rate Outlook

THE Reserve Bank of Australia left the interest rates unchanged in February so it could assess the impact of earlier rate rises from both itself and the big banks on the domestic economy. The central bank board surprised financial markets by leaving the overnight cash rate steady at 3.75 per cent earlier this month.

"In considering the level of interest rates, members noted that the three increases in the cash rate late in 2009, together with the widening in the margins between the cash rate and many lending rates, had meant a material adjustment to the stance of monetary policy," minutes from the board meeting released today said.

"Members judged that monetary conditions were no longer exceptionally accommodative, though the structure of interest rates was still somewhat below average." The RBA had lifted the cash rate by 25 basis points at each of its meetings in October, November and December to its current 3.75 per cent.

The board noted the decision to leave the cash rate unchanged was "finely balanced" - as it also was at the December meeting - but its members expected further rate increases if the economy continued to improve as predicted.

"But they did not regard that outlook as requiring an increase at every meeting, and they saw the earlier moves to begin withdrawing monetary stimulus promptly as affording the board a degree of flexibility in its subsequent decisions," it said.

"This allowed the possibility of waiting to receive some more information on how the economy was responding to the monetary tightening that had already occurred.

"Such a course would also allow time to monitor events overseas."

The bank said most market participants had expected the cash rate to rise this month, but board members had decided the "stronger case" was to leave the cash rate unchanged.
Market economists had widely expected a quarter of a percentage point rise to 4.0 per cent on February 2.

"This decision would be accompanied by communication that, if economic conditions evolved broadly as expected, further adjustments to policy would probably be needed over time to ensure that inflation remained consistent with the target over the medium term," the minutes said.

The RBA uses monetary policy, or interest rates, to keep inflation within a target range of two to three per cent over the economic cycle. Headline consumer price inflation (CPI) was 0.5 per cent in the December quarter for an annual rate of 2.1 per cent, recent official data show.
Underlying inflation, the RBA's preferred measures as it removes volatile items, was 0.6 per cent in the December quarter, while the annual rate was 3.4 per cent - still above the bank's target range.

"Members noted that the forecasts were for further declines in the year-ended rate of underlying inflation, though the expected trough in inflation had been revised up slightly," the RBA said.

In its quarterly statement on monetary policy released on February 5, the RBA forecast underlying inflation to fall within its inflation target in the first half of 2010.

To read more please visit www.news.com.au

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Commonwealth enjoys massive windfall as it declines to lift deposit rates

2010-02-11T13:11:00.000-08:00

Australian Dollar Rate Outlook

FIRST it was home buyers getting slugged - now it's those of us lucky to have a few Australian dollars to tuck away in a deposit account.

A decision by Commonwealth Bank bosses to keep rates low has delivered a massive windfall - a $2.94 billion half-year profit.

While its competitors were quick to lift deposit rates in a bid to attract customers, the CBA maintained ultra-low rates until the final weeks of the first half of 2009-10. "If you're a CBA shareholder you'd be delighted with the result, but if you're a CBA customer you'd have to be asking yourself if they're providing you with the best possible service," said Choice spokesman Christopher Zinn.

He said savers should shop around: "The banks are fully cognisant that a lot of people just roll over and don't move to take better rates." Figures released by the CBA showed its docile depositors did not move their money into better-paying accounts at rival banks. CBA chief executive Ralph Norris was coy when asked about the windfall reaped from lazy depositors. Asked about the stickiness of so-called "dumb money", Mr Norris said: "There is a proportion of our funds which is less rate-sensitive. that gives us an advantage."

Mr Norris indicated, however, that the bank would soon move to make its transaction and online saver accounts more competitive. CBA, Australia's largest bank, paid a measly average of 2.73 per cent on the $78 billion in its term deposit accounts, almost half what it paid a year ago.
Its plethora of transaction account holders only received a yield of 1.32 per cent on a total of $69 billion, again about half the average rate paid 12 months ago.

The Commonwealth Bank's half-year accounts also show it has been relatively kind to its home loan customers, despite instances of the bank lifting its standard variable rate higher than the Reserve Bank's cash-rate increases.

To read more please visit www.news.com.au

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Australian Property Prices continue to rise

2009-11-30T05:21:00.000-08:00

Australian Dollar Rate Outlook

MELBOURNE'S property spree looks set to continue despite the looming threat of an interest rate rise.

Economists tip the Reserve Bank of Australia board will make history when it meets tomorrow by increasing official rates for the third month running. A 0.25 percentage point increase would bring the cash rate to 3.75 per cent, adding $45 a month to repayments on the average Australian mortgage of $300,000. There were more than 1000 auctions at the weekend, and about 2500 more are scheduled in the three remaining weeks before Christmas. The flood of stock trimmed Melbourne's auction clearance rate from its recent levels of 80 per cent to 78 per cent. Results were still solid despite heavy rain yesterday morning.

"Nothing's dampening the market at the moment," said Hocking Stuart Richmond director Chris Murphy. Yesterday afternoon Mr Murphy sold a Victorian terrace in Cubitt St, Richmond, for $756,000 - well above the advertised selling range of between $620,000 and $680,000. "We've sold nine out of 10 in Richmond this weekend," Mr Murphy said. A rise in interest rates would do little to cool the red-hot market, he said.

If the RBA decides on an increase to 3.75 per cent the official cash rate would still be lower than it has been for the past 20 years, excluding the global financial crisis. "We're coming off such a low base I don't think it will make a difference," Mr Murphy said. "If anyone's got any cash left after the GFC they're out and about bidding."

Real Estate Institute of Victoria's Robert Larocca said a lift in interest rates would be unlikely to shift the market until next year.

"If you're in the market at the moment you're committed and unlikely to change your course," he said.

Would-be homebuyers were aware that interest rates are on the way up and were already pricing in further rate increases. He said rates couldn't remain at emergency lows indefinitely.

Australian Dollar Outlook is bright as RBA looks to Hike Interest Rates

2009-11-17T02:07:00.000-08:00

Australian Dollar Rate Outlook

THE Reserve Bank of Australia says further interest rate rises are "most likely appropriate", but the pace at which its adjustments will be made remains open. The central bank on November 3 raised the cash interest rate by 25 basis points higher to 3.5 per cent, its second rate rise in as many months.

The minutes of its board meeting that day, released today, said that if economic conditions continued to evolve as expected, a further gradual adjustment in the cash rate would most likely be appropriate over time. "But the pace of that adjustment remained an open question," the minutes said.

The RBA said it was "conscious of balancing risks" when considering adjusting interest rates, as it noted improved consumer and business confidence, better employment data and less spare capacity in the economy.

"On the one hand, business and consumer confidence could prove fragile, and economic activity at home and abroad might slow more than expected as the effects of stimulus measures faded," the minutes said.

"Also, the rising Australian Dollar exchange rate would constrain output and dampen inflationary pressure, and credit conditions for some borrowers remained quite difficult. "On the other hand, a lengthy period with interest rates at very low level carried its own risks, particularly once the threat of serious economic weakness had passed."

The bank had lowered interest rates to a 49-year low of three per cent earlier this year to deal with the threat of the global financial crisis. Rates stayed at that historically low level between April and October, when the bank raised rates by 0.25 per cent.

The minutes said that financial markets, while still volatile, were in better shape than they were six months ago, while debt and equity markets were providing easier, and less costly, access to funding. Better-than-expected labour force data for September, showing a drop in the unemployment rate and an up tick in total employment, was evidence that unemployment was more moderate than expected, the minutes said.

The local economy generated 40,600 new jobs in September, while the rate of unemployment dropped 0.1 per cent to 5.7 per cent in the month. Quarterly consumer price index data (CPI) released around that time also showed easing in the underlying rate of inflation.

"Given the the earlier period of lower demand growth and the moderation of labour costs, this trend decline in inflation was expected to continue over the coming year, with underlying and CPI inflation expected to be consistent with the target in 2010," the minutes said.

The central bank's stated aim is for inflation to be within a target of two to three per cent in the medium term. The minutes showed the bank took note of a raft of economic data pointing to improved economic conditions among Australia's trading partners.

"Asian economies were generally growing at quite solid rates, after having had sharp contractions in some cases. "The important consideration for the board was that, for the group of economies that comprise Australia's major trading partners, a broad range of forecasts were expecting growth to be around trend in 2010."

To read more please visit Wall Street Journal

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Australian Dollar Exchange Rate shoots up to 15-month high vs US Dollar

2009-11-12T05:33:00.000-08:00

Australian Dollar Rate Outlook

The Australian dollar exchange rate shot up almost three quarters of a cent to a 15-month high immediately after the release of better-than-expected employment figures. At 12.00pm AEDT, the dollar was trading at $US0.9362/66, up from yesterday's close of $US0.9294/99. During the local session, the unit traded between $US0.9298 and $US0.9371, its highest point since August 2008.

Nomura chief economist Stephen Roberts said the Australian dollars strength came after the release of unemployment data. "Those figures were stronger than expected," Mr Roberts said.
"We've had back to back monthly increases now in employment, which has broken a bit of that sore tooth for the time being where employment was always alternating between a good month and a negative month in terms of change."

Australia's unemployment rate was a seasonally adjusted 5.8 per cent in October, compared with unrevised 5.7 per cent in September, the Australian Bureau of Statistics said today.

Total employment rose by 24,500 to 10.832 million in October, seasonally adjusted. Michael of Sydney Full-time employment rose by 2,900 to 7.591 million in the month and part-time employment was up by 21,500 to 3.241 million. The participation rate in October was 65.2 per cent, compared with 65.2 per cent in September.

The median market forecast was for total employment to have declined by 10,000 in October, an unemployment rate of 5.8 per cent and a participation rate of 65.2 per cent. Mr Roberts said Australia needed employment growth because the labour force was growing faster. "So without relatively firm employment growth, the unemployment rate just slightly drifts up," he said.

The Australian dollars performance was strong but it still had some way to go to reach the highs of US$0.9500 in August and US$0.9850 in July last year. "Today it's done a fair bit of work," he said. "This number has given it a boost for the time being."

Mr Roberts forecast the Australian dollar would trade around the US0.9370-80 mark and drop back before the close of domestic trade.

To read more please visit http://www.news.com.au/business/story/0,27753,26340135-31037,00.html

Pounds to Australian Dollars = 1.7820
Euros To Australian Dollars = 1.6060
Australian Dollars to US Dollars = 0.9295
Australian Dollars to New Zealand Dollars = 1.2625

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Positive Australian housing data overnight saw investors Buy Australian dollars

2009-11-09T08:15:00.000-08:00

Australian Dollar Rate Outlook

The euro exchange rate remained strong against the dollar in early New York trading Monday, hovering around the psychologically important $1.50 mark, after rising global stocks suggested markets would shake off last week's disappointing U.S. jobs data and continue to load up on risk.

Finance ministers and central bankers at this weekend's meeting of the Group of 20 industrialized and developing nations didn't mention currencies in their official communique, removing what had been a possible obstacle to placing bets on higher-yielding currencies.

If U.S. stocks follow the lead of Asian and European exchanges, the euro and other higher-yielding currencies are likely to extend their gains against the best US dollar rate. U.S. stocks are expected to open higher.

In early morning trading, the euro was at $1.4991 from $1.4844 late Friday, according to EBS via CQG. The dollar was at Y89.95 from Y89.96, while the euro was at Y134.80 from Y133.53. The U.K. pound was at $1.6773 from $1.6608

The Dollar Index, a trade-weighted basket of six currencies, was at 75.109 from 75.784 late Friday. The index was flirting with nearly 15-month lows.

Positive Australian housing data overnight sent investors into the Australian dollar, which lifted other higher-yielding currencies. The Australian dollar hit a two-week high, at $0.9299, on the data that showed Australian housing-finance approvals rose 5.1% on the month in September, more than the 3% rise expected.

The continuing positive pace of Australia's economic rebound added to the view that the Reserve Bank of Australia may deliver more increases to its key interest rates in coming months, boosting investor sentiment for the Australian currency.

Australia's economic turnaround contrasts with the disappointing U.S. jobs data reported Friday, which showed unemployment rose above 10%, its highest level in nearly three decades.

The weekend's G-20 meeting in Scotland also proved uneventful for financial markets. The group didn't mention currencies at all in its final communique. Some analysts had expected exchange rates would be discussed.

More direction appeared to come from comments by U.S. Treasury Secretary Timothy Geithner and U.K. Prime Minister Gordon Brown, who warned against ending financial-crisis support programs prematurely. In other words, there won't be any rush to tighten monetary policy, which should continue to weigh on the low-yielding US dollar exchange rate.

There are no key U.S. data Monday, which means the euro exchange rate and other higher-yielding currencies should track the direction of the stock market.

Australian Dollar set to rise as RBA hike australian mortgage rates again

2009-11-02T12:25:00.000-08:00

Australian Dollar Rate Outlook

A CHORUS of business leaders, led by Aussie chairman John Symond, has pleaded with the Reserve Bank of Australia to take baby steps in its push to raise interest rates away from "emergency levels".

The RBA stands to cripple thousands of homeowners if it raises official Australian interest rates too rapidly, in increments of more than 0.25 per cent, or by lifting rates above five per cent within a year, the home loan tsar told business leaders in Sydney yesterday, The Daily Telegraph reports. The Reserve is expected to lift its cash rate by 0.25 per cent, to 3.5 per cent, today with economists now ruling out the previously predicted "shock and awe" 0.5 per cent hike.

Relatively flat inflation figures, combined with further instability on global sharemarkets, have even raised the slim prospect of rates remaining on hold. Despite the softening economic environment, with the Reserve regularly stating the need to quickly move rates towards more neutral levels of 5 per cent, economists are now banking that official interest rates will hit 4.25 per cent within six months. Mr Symond told the Australia-Israel Chamber of Commerce such a rise would hurt the vulnerable. "Hopefully Glenn Stevens follows through with only gradual increases," he said.

"That's all we need. Let's hope they don't follow through with increases as dramatic as they cut on the way down. "An increase of 1 per cent over time is not going to make much difference, but 2 per cent and from there on, there are going to be a lot of people lose their homes." His sentiments were backed up by the Australian Retail Association. Executive director Russell Zimmerman said retailers were calling for calm from the Reserve and a hold on rates till next year to allow the sprouts of economic recovery to bear some fruit. "Retailers are concerned that interest rate rises now could slow down the wheels of economic recovery that are just starting to turn. Retailers are looking for a bit more momentum before higher interest rates start to take cash away from consumers," he said. Although higher interest rates will hurt its business, Myer was left licking wounds of a different kind yesterday.

The department chain, fronted by fashion icon Jennifer Hawkins, relisted its shares on the Australian sharemarket on a day of heavy selling across the board. Myer's shareholders, which include Hawkins, saw their initial investment in the company drop a staggering 8.5 per cent in minutes. Meanwhile, billionaire property developer Harry Triguboff suggested that interest rates need not be on pause, but should be clipped further to levels in the UK and US.

Pounds to Australian Dollars = 1.8157
Euros To Australian Dollars = 1.6357
Australian Dollars to US Dollars = 0.9023
Australian Dollars to New Zealand Dollars = 1.2450

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Australian Property Prices set to rise even with stronger Australian Dollar

2009-10-29T04:40:00.000-07:00

Australian Dollar Rate Outlook

TASMANIA'S Clarence City is Australia’s best property bargain according to a list of the country’s 100 hottest suburbs. Investors can pick up an average house in Clarence City suburbs of Clarendon Vale and Rokeby to Hobart's east for just $178,000, according to a report in Australian Property Investor magazine.

It’s a "long-term hold" but the area will see significant growth in five to seven years, the report says. The magazine asked Australia’s top property experts to list the hottest 100 suburbs poised for "strong capital growth" over the next 12 months.

With an average median house price of $548,000 across the 100 locations, news.com.au identified the cheapest of those suburbs and they are listed below. You can read the full list in the magazine, which is out today. Also released today, the Australian Property Monitors quarterly house price series showed house price growth of 3.7 per cent over the September quarter.

"Moderate to strong growth is expected across the market as a whole for the remainder of 2009 and 2010," APM's Matthew Bell said. "The question as to whether this growth can be sustained throughout 2010 depends on how quickly mortgage rates rise in the next six months," Mr Bell said.

Hottest suburbs with the lowest average house price

Queensland
Gympie $260,000
Ipswich $269,000
Kingaroy $270,000
Beaudesert $311,000

New South Wales
Gunnedah $208,000
Branxton $349,000
Granville $353,000
Shoalhaven $388,000

Victoria
Portland $189,000
Redan $194,000
Hastings $270,000
Frankston $300,000

WA
Geraldton $345,000
Thornlie $363,000
Bassendean $415,000
Hamilton Hill $430,000

Tasmania
Clarence City $178,000
Lutana $282,000
Mount Nelson $420,000
Hobart $425,000

NT
Rapid Creek $568,000

South Australia
Ceduna $245,000
Glanville $249,000
O'Sullivan Beach $261,000
Christies Beach $301,000

ACT
Gungahlin $458,000

Pounds to Australian Dollars = 1.8218
Euros To Australian Dollars = 1.6294
Australian Dollars to US Dollars = 0.9037
Australian Dollars to New Zealand Dollars = 1.2450

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Best buy Australian Dollar as the exchange rate looks towards Parity

2009-10-20T00:48:00.000-07:00

Australian Dollar Rate Outlook

The Australian dollar was once again a top performer to finish the week’s trade as speculators poured into the progressively higher-yielding Aussie currency. Hawkish rhetoric by Reserve Bank of Australia Governor Glenn Stevens underlined the bank’s resolve to tighten monetary policy sooner than later. Indeed, Overnight Index Swaps are now pricing in an impressive 200+ points of rate hikes in the coming 12 months-by far the most of any G7 central bank. All else remaining equal, this should provide solid Australian Dollar support against lower-yielding counterparts. Yet the pace of Australian Dollar appreciation has been nothing short of impressive, and one has to wonder whether the currency can continue its recent advances. An effectively empty economic calendar gives little in the way of foreseeable event risk in the week ahead, and as such it remains most important to watch for major moves in key asset classes.

A speech by RBA Governor Glenn Stevens set the tone for what may be an aggressive wave of monetary policy tightening. Stevens discusses monetary stimulus in light of the global financial crisis, emphasizing that Australia seems to have weathered the broader economic crisis and escaped relatively unharmed. Economic resilience suggests that previously aggressive interest rate cuts have done their job, and in fact the central bank has already begun reversing its monetary policy accommodation. In its recent rate hike the RBA stated that rate hikes should "gradually" be pulled back.

Yet Stevens surprised many when he effectively foreshadowed rate hikes with similar intensity to the large cuts we saw through the financial crisis. He clarifies that he does not believe that the Australian economy is currently "too strong", but he does go on to say "that the very low interest rate settings were designed for a weaker economy than we are in fact facing." Interest rate expectations jumped on the commentary, and in fact markets are now pricing in a 50 percent chance of an aggressive 50 basis point (0.50 percent) rate increase through the November meeting.

Expectations are running high for Australian Dollar yields and the currency itself. The key question in the weeks and months ahead will be whether reality can match those lofty expectations. As it stands, a number of respected research desks have called for Australian Dollar parity against the US Dollar rate in the coming months. Yet near record-high Aussie correlations to key commodity prices suggest that AUD forecasts may depend on broader moves in key financial asset classes. Suffice it to say, there should be no shortage of excitement in upcoming Australian Dollar trade.

or the full story visit www.dailyfx.com

Pounds to Australian Dollars = 1.7679
Euros To Australian Dollars = 1.6162
Australian Dollars to US Dollars = 0.9257
Australian Dollars to New Zealand Dollars = 1.2295

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Australian dollar could soon be worth 1.100 US Dollars

2009-10-16T01:37:00.000-07:00

Australian Dollar Rate Outlook

THE Australian dollar appears headed towards parity with the US dollar after Reserve Bank governor Glenn Stevens agreed the economy's strength could drive it"way up" to $US1.10.
The dollar jumped after Mr Stevens also suggested that the Reserve Bank would not be “too timid” in further increasing the official interest rate, breaking through US92c to reach 14-month highs. His comments startled foreign exchange market analysts and encouraged money markets to bet that the Reserve would lift its cash rate from 3.25 per cent to at least 3.75 per cent before Christmas and keep lifting next year, The Australian reports.“I tend to agree with him,” the Commonwealth Bank’s chief currency strategist, Richard Grace, said of Mr Stevens’s Aussie dollar bullishness.

But while Mr Stevens suggested the dollar’s rise was the result of Australia’s economic vigour, Wayne Swan warned that it would hurt farmers and other export industries. “I do understand some people will do it really tough as a consequence of a higher AUD rate ,” the Treasurer said. Since October 2, just before the Reserve Bank lifted its 3 per cent “emergency” cash rate, the dollar has gained nearly 7 per cent, from US86c to US92.11c in European trading last night. The dollar’s rise could further increase the tension between the Reserve Bank’s rate rise move and the Rudd government’s rejection of calls to unwind its budget stimulus more quickly. In theory, an expansionary budget policy pushes up an economy’s exchange rate.

The Reserve Bank is not intervening in foreign exchange markets to dampen the currency’s ascent, which is akin to a policy tightening that mostly hits exporters and businesses that compete against imports. But it also contains inflation by making imports cheaper. The Australian sharemarket rose again yesterday on the back of improved investor confidence in the Australian and global economies, with the All Ordinaries index gaining 28.5 points or 0.59 per cent to hit a one-year high.

Mr Stevens was asked at a breakfast function in Perth whether the Reserve Bank had any tools to prevent speculators buying Australian dollars to $US1.10. Mr Stevens replied that, rather than speculators, there usually was a rational reason for big exchange rate movements. “You could do a scenario where the exchange rates goes way up,” he said. “We’ve got one of the better-performing economies in the world. Even at very low interest rates, we still have a positive differential and we’re a country where the people here are, I think, reasonably confident about the future and foreigners are fairly confident about our future, and it’s not entirely surprising that they’re a bit keen on the currency.”

Mr Stevens suggested that this could change if economic recoveries in other countries surprised on the upside. “But you could do a scenario of the one you suggest and, in that world, perhaps inflation is lower, but the reason the AUD exchange rate is up there is probably that there are some very strong growth dynamics and trade dynamics at work here.”

The Australian dollar exchange rate has not traded at parity with the US dollar rate since the local currency floated in late 1983, but appeared headed towards this level before the global crisis hit.

for the full story visit http://www.news.com.au

Pounds to Australian Dollars = 1.7738
Euros To Australian Dollars = 1.6155
Australian Dollars to US Dollars = 0.9226
Australian Dollars to New Zealand Dollars = 1.2395

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Get in the queue for an Australian property boom

2009-08-25T10:41:00.000-07:00

Australian Dollar Rate Outlook

IT'S the proof we've been waiting for that the housing boom is back - at dinner tables across the country talk is returning to the old conversation chestnut, Australian property prices.

While the global financial crisis made us all armchair investment analysts, now lower interest rates, government bonuses and the first home market boom was again making property the hot topic.

On any given Saturday huge numbers of prospective buyers are flocking to open houses everywhere. Nowhere is the craze more evident than in the median home market, where young families are trying to make the most of the demand from first time buyers to sell and trade up for more space.

But with medium-priced houses in limited supply, real estate circles are rife with rumours of auction punch-ups and inspection queues rivalling nightclubs. Sydney's Michelle Wheeler and Reima Woolhouse have been riding the $700,000 to $1.2 million price bracket explosion for six months.

The pair recently sold two properties and have been renting while they try to find a home with a bit of space. "There are properties we wanted to buy but we didn't make the first open house because they have sold before then or they just didn't tick the right boxes for us," Ms Wheeler said. "We've been starting to feel a bit disheartened. "We've been saying to each other selling the two properties was less stressful than buying."

On Saturday, the pair inspected an original Californian bungalow on Iandra St, Concord West.
Likely to sell for about $900,000 at auction next month, it is on the market for the first time in 45 years and requires significant work. The home had more than 35 groups through, many expressing interest. Paul Pettenon from Raine and Horne Concord said homes such as that had been selling just days after being advertised.

Recently, a two-bedroom Concord property that did make it to auction attracted 36 registered bidders. "It was mayhem, you couldn't control it actually," he said.

"I have been in real estate for 15 years and I have never seen anything like it."
And it is not just the inner-west. Megan Bruton from McGrath Hunters Hill said open houses around Ryde have needed three open house agents to deal with the record numbers of people inspecting homes.

"Previously when we launched a property we would get 20 or 30 groups through if it was really hot," she said. "But now we are getting 60 to 75 which equates to about 120 to 200 people for just a half-hour." Business analyst for LJ Hooker David Maher said low stock and high demand in the second-home buyer's bracket was making a seller's market.

"What everyone has been focusing on is the first-home buyer's market but that is simply not true," he said. According to his figures, homes in the $700,000 to $1.2 million range were selling at auction 80 per cent of the time, up from the beginning of the year when only 40 per cent were selling. "Auction clearance rates haven't been this good in many years," Mr Maher said.

Real Estate Institute of NSW president Steve Martin said many new people were in the market.
"First-home buyers in particular are feeling in control of their own destiny and not in the hands of landlords," he said. "When there is insecurity, buying property becomes a security."

For the full story visit www.news.com.au

Pounds to Australian Dollars = 2.0800

Euros To Australian Dollars = 1.7700

Australian Dollars to US Dollars = 0.7826

Australian Dollars to New Zealand Dollars = 1.2450

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Australian Banks Downgraded

2009-06-22T23:40:00.000-07:00

Australian Dollar Rate Outlook

Moody's says that its industry outlook for banking systems in Australia and New Zealand is negative, reflecting the impact of the slowdowns in global and domestic economies, but both
systems also remain robust.

These headlines helped keep New Zealand Dollars and Australian Dollars exchange rate trading near the lows overnight, and on the open in London we've sold Australian Dollars for real money names. However the dip in New Zealand Dollars rate has seen some good exporter demand as resting bids are finally filled.

Pounds to Australian Dollars = 2.0800
Euros To Australian Dollars = 1.7700
Australian Dollars to US Dollars = 0.7826
Australian Dollars to New Zealand Dollars = 1.2450

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Australian Dollar fall was due to hedge funds

2009-05-22T00:21:00.000-07:00

Australian Dollar Rate Outlook

The precipitous fall in the Australian dollar was increasingly driven by the whims of financial market players, such as hedge funds, while "real" economic developments played a diminishing role, The Sydney Morning Herald reports citing the Reserve Bank of Australia. The plunging Australian dollar shocked markets last year when it toppled from within a whisker of $1.00 to almost 60 US cents, a move which few analysts had predicted. In new research, the RBA says that fund managers' balance sheet adjustments and their use of the dollar as a proxy for emerging markets have exacerbated the dollar's slump, the report says.

Pounds to Australian Dollars = 2.0300
Euros To Australian Dollars = 1.7800
Australian Dollars to US Dollars = 0.7800
Australian Dollars to New Zealand Dollars = 1.2690

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Australian Dollar Exchange Rate Outlook is Higher

2009-03-25T04:29:00.000-07:00

Australian Dollar Rate Outlook

Some of the Foreign Exchange charts are peculiar. We understand the US dollar Swiss franc chart is strange because of the carry trade/safe-haven/intervention stories. But look at the Australian Dollar chart. When we draw a channel from the lowest low in November, what we get is a horizontal, flat channel, not a rising one. Of course we can draw a channel in a shorter time frame and get an upmove, but in the Big-Picture, we do not get a true rising trend. This could imply that some foreign exchange traders are buying "commodity currencies" on a bet that US recovery will boost demand, but they are not really committed to the global recovery scenario just yet. Given the relatively high yield in the Australian Dollar, we think it should be higher….

Since it's not, traders are not yet convinced the recession bottom is in.

The flat AUD makes us suspect the euros to US dollars uptrend. Maybe it’s just a "move" and not a trend. The euro/yen is rising without pause or correction, so have to wonder if the euro exchange rate is strong mostly because the yen is weak. Today is "pullback Tuesday" and we are getting the usual profit-taking after a big move the week before, but we also wonder if the pullback could take on a life of its own. As foreign exchange traders, we must jump on every bandwagon and seeming breakout, but as economic analysts, we need to look at a wider timeframe chart and this time the wider chart is not offering comfort and confirmation.

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Pounds to Australian Dollars = 2.0935
Euros To Australian Dollars = 1.9384
Australian Dollars to US Dollars = 06965
Australian Dollars to New Zealand Dollars = 1.2394

Bye For Now

Barbara Rockefeller
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Pounds to Australian Dollars EXchange Rate still heading lower

2009-03-20T07:35:00.000-07:00

Hi All,

Seems that our thought that the Australian Economy would continue to outperform the rest of the world has come true (for now) with the Reserve Bank of Australia holding on cut australian interest rates this month and looking to do the same again whilst they see the full effect of the previous stimulus packages. This is very step contrast to here in the UK were the pounds woes keep getting worse and worse as you predicted back in Feburary in our post Australian Dollar Rate Outlook - Australian economy continues to surprise.

We are now at an interesting point is it time to give up on this view or is the pounds to Australian Dollars rate still heading lower. I personally feel that there is limited opportunity for the australian dollar rate to go up as the good news could start coming to an end and as there has been so much bad news from the uk - surely we are due some good?

So for those of you moving to australia look for the opportunity to sell pounds buy australian dollars at 2.1700 or better if you can.

If you have any questions or want a free quote feel free to call + 44 207 183 2790

Pounds to Australian Dollars = 2.0960
Euros To Australian Dollars = 1.9714
Australian Dollars to US Dollars = 06902
Australian Dollars to New Zealand Dollars = 1.2285

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Damian George
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Australian Dollar seen stronger against the Pound, Euro and US Dollar

2009-03-20T07:04:00.000-07:00

Australian Dollar Rate Outlook

The Australian Dollar has opened higher for the eighth straight local session as investors continued to sell US dollars in response to the US Federal Reserve decision to start buying US Treasuries.

At 7am AEDT, the Australian dollar rate was trading at $US 0.6860/64, up from yesterday's close of $US0.6746/48. It was the strongest start to the local foreign exchange trading day since January 12 this year, when the unit began at $US0.7028/35. During the overnight offshore session, the unit moved between a low of $US0.6734 and a high of $US0.6943.

The Australian dollar exchange rate rallied through most of the offshore session, with the focus remaining on the US Federal Reserve's intention to purchase long-dated US Treasury securities.
GFT Forex director of currency research Kathy Lien said the dollar advanced on continued US dollar weakness."I think that weakness will extend over the next few weeks and that could lead to further gains in the Aussie dollar and the euro exchange rate," Ms Lien said from New York.
"Even though US equities are lower and bond yields are higher, the clearest ramifications of the Fed's actions yesterday is that they will need to print US dollars."

Full story visit www.news.com.au

Pounds to Australian Dollars = 2.0960
Euros To Australian Dollars = 1.9714
Australian Dollars to US Dollars = 06902
Australian Dollars to New Zealand Dollars = 1.2285

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Australia seems to be the odd man out these days - the only major economy not in recession

2009-03-04T09:28:00.000-08:00

Australian Dollar Rate Outlook

Australia Dollar seems to be the odd man out these days - the only major economy not in recession and with a central bank that yesterday declined to cut rates because the economy is okay.

Today GDP for Q4 fell 0.5% q/q after rising a feeble 0.1% in Q3, just escaping the formal definition of recession. Q4 was below forecasts of ongoing growth of 0.1% or perhaps 0.2%, so a surprise. On the y/y basis, GDP growth decelerated from 1.9% in Q3 to only 0.3% in Q4. A bank analyst writes that for this year, Australia will probably get a minor contraction of 0.25%. This is actually not too bad and certainly better than Japan, whose GDP contracted over 12% y/y in Q4. And if China comes back with any oomph, exports could be the leader.

The Australian Dollar fell on the surprise GDP news but we wonder if it doesn’t have some serious support. Growth counts. Relative growth counts, too. If the Reserve Bank of Australia can avoid cutting rates, Australia will keep its title of most desired investment currency - relative returns count most of all.

Pounds to Australian Dollars = 2.1700
Euros To Australian Dollars = 1.9400
Australian Dollars to US Dollars = 06500
Australian Dollars to New Zealand Dollars = 1.2832

Bye For Now

Barbara Rockefeller

Reserve Bank of Australia left rates unchanged at 3.25%

2009-03-03T05:41:00.000-08:00

Australian Dollar Rate Outlook

RBA: The Reserve Bank of Australia left rates unchanged at 3.25% Tuesday call.

Comments from RBA Governor Stevens:

"Demand has not weakened as much as in other countries and, on the basis of currently available information, the Australian economy has not experienced the sort of large contraction seen elsewhere. The Australian financial system remains strong and the monetary policy transmission process is working to deliver large reductions in interest rates to end borrowers. Nonetheless, economic conditions are clearly weak, and given the speed and scale of the global economic deterioration and its effect on confidence, weak conditions are likely to continue in the near term. Inflation is likely to decline over time.... There has already been a major change in both monetary and fiscal policy.... Together with the substantial fiscal initiatives, the cumulative decline in interest rates will provide significant support to domestic demand over the period ahead....The Board will consider the position again at its next meeting"

The Australian Dollar exchange rate was the main winner on the robust nature of Gov Stevens comments and RBA's and desision and was up more than 2% across the board.

Pounds to Australian Dollars = 2.2218
Euros To Australian Dollars = 1.9600
Australian Dollars to US Dollars = 06445
Australian Dollars to New Zealand Dollars = 1.2900

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Interest rates set to hit record low tomorrow

2009-03-02T10:03:00.000-08:00

Australian Dollar Rate Outlook

Australian interest rates are tipped to fall to record lows tomorrow, as the effects of the global downturn threaten to hit our economy hard. Thirteen of 16 economists surveyed expect the Reserve Bank of Australia to cut the official cash rate at its monthly board meeting tomorrow.

The median forecast was for a 50-basis-point rate cut.

That would take the cash interest rate to a record low of 2.75 per cent.

A further 50-basis-point cut, if passed on in full by lenders, would knock another $77.96 a month off the average mortgage of $249,645 and would send the cash rate under the record low monthly average rate of 2.89 per cent seen in January, 1960. While domestic business data is still strong, many economists say deteriorating conditions among Australia's key trading partners will weigh on the domestic economy.

More optimistic analysts said the run of rate cuts and $52 billion in Federal Government stimulus programs would support local demand. shane of sydney RBC Capital Markets senior economist Su-Lin Ong said a 50-basis-point rate cut in March was a close call, with the Reserve near the end of its easing cycle.

"It's pretty clear they are very reluctant to cut any more but the reason we think a move is justified is the global downturn has worsened since the last board meeting," she said.

UBS senior economist George Tharenou said the prospect of a technical recession - measured by two consecutive quarters of negative economic growth - in the first half of this year justified the need for a 50-basis-point cut this week.

ANZ economist Riki Polygenis, however, said the economy is yet to feel the full effects of the large Reserve rate cuts since September. That reinforced the case for a 25-basis-point rate cut this month.

For the full story visit http://www.news.com.au/business/money/story/0,28323,25125462-5016110,00.html

Pounds to Australian Dollars = 2.2218

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First home buyers boost Australian new home sales

2009-03-02T03:03:00.000-08:00

Australian Dollar Rate Outlook

NEW Australian home sales surged by almost 9 per cent per cent in January thanks to increased activity by new home buyers, a survey shows.

The Housing Industry Association (HIA) said the best home affordability conditions in five years and a boost to the first home owners grant had propelled the sale of new detached houses.
Detached home sales increased by 9.8 per cent in the month and were up by 3 per cent for the three-months to January.

But pre-contract sales of apartments and home units declined for the fourth consecutive month, indicating a continued softness in rental investor activity.
"A better start to 2009 for new home sales is an encouraging result,'' HIA chief economist Harley Dale said.

"But a sustained recovery in new home construction will rely on trade-up buyers and investors returning to the market, and the timely procurement of the planned 20,000 new public and community housing dwellings.''

Dr Dale said the unlocking of many of the private dwelling projects caught up in the credit crunch would go a long way to ensuring a broad-based private sector housing recovery.

For the full story visit http://www.news.com.au

Pounds to Australian Dollars = 2.2230

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Australian Dollar Rate Outlook - Australian economy continues to surprise

2009-02-27T03:25:00.000-08:00

Australian Dollar Rate Outlook

The Australian economy continues to surprise to the upside and Governor Stevens comments last Friday suggest that the Reserve Bank of Australian not to cut Australian mortgage rates when they meet next week. This is against the Foreign exchange markets current view of a 0.50% interest rate cut. If the RBA doesn't cut rates we expect that the that the Australian dollar will rally against the pound, us dollar, euro and New Zealand dollar. (this is a view shared by UBS that have stated that they favor the AUDNZD to target 1.3300 from its current level of 1.2720.)

So how does that effect you if you need to buy Australian dollars?

We suggest that Prudence is needed if you are migrating to Australia and we have suggested our clients lock in 2.2000 plus in regards to the pounds to Australian dollar exchange rate as this rate could easily fall back below 2.1400 in the coming days.

Continued bad news from the UK cant be ignored much longer and foreign exchange traders tend to behave like sheep and we switch their views much quicker than many realise and I wouldn't be surprised to see an exchange rate of 2.1000 within 48hrs.

If you want to talk through your options and a free quote please call us at IMS Foreign Exchange on +44 207 183 2790

Pounds to Australian Dollars Exchange rate = 2.22028
Euros to Australian Dollars Exchange rate = 1.9800
US Dollars to Australian Dollars Exchange rate = 0.6348
New Zealand Dollars to Australian Dollars Exchange rate = 1.2730

Regards

IMS Foreign Exchange
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Contact IMS Foreign Exchange + 44 207 183 2790

Australian Homes most affordable in five years at Australian Mortgage Rates Fall

2009-02-18T04:08:00.000-08:00

Australian Mortgages update

THE Australian dream of owning a home is more affordable now than it has been for five years following lower interest rates and greater Government subsidies, a report says.

The Housing Industry Association and Commonwealth Bank First Home Buyer Affordability index improved by 39.2 per cent to 153.6 points in the December quarter from 110.3 index points for the September quarter.

First home buyers last had housing this affordable in the March quarter 2003, according to the index. HIA chief executive Chris Lamont said lower mortgage rates and the boost to the first home owners scheme made it easier to buy a house.

"For would be first home buyers, conditions have improved significantly and clearly many Australians are taking up the opportunity to get into home ownership," Mr Lamont said in a statement."Cuts with interest rates and the first home owners grant have made a large impact.''

The Reserve Bank of Australia (RBA) lowered the cash rate by three percentage points to a six-year-low of 4.25 per cent in the last four months of 2008.
And the central bank cut the cash rate another one percentage point to a 45-year-low of 3.25 per cent on February 3 in a bid to cushion the domestic economy from a possible recession.
Commercial banks have lowered their standard variable mortgage rates by an average 3.75 percent points in response since September last year.

Repayments on an average home loan fell by 26 per cent to $2,056 a month by the end of the December, from $2796 the previous quarter.

In mid-October, the Federal Government doubled the first home owners grant to $14,000 for established dwellings and tripled it to $21,000 for newly built homes until June 30.
Households would need an income around $70,000 to buy a modest home, the report said.

"Previously, a household would have to be earning in the order of $85,000 to afford a modestly priced home without going into severe mortgage stress,'' Mr Lamont said.

"The improvement in housing affordability means those on a more modest income can now contemplate a home of their own.''

Buying a home was more affordable in all capital cities and regional areas during the December quarter, the report said, with the largest improvement occurring in Perth, Brisbane and regional Western Australia.

For the full story visit www.news.com.au

Pounds to Australian Dollars = 2.2230

Bye For Now

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Australian Dollar - one Senator in Australia’s Parliament derailed the A$42 billion stimulus package

2009-02-12T07:43:00.000-08:00

Foreign Exchange - Australian Dollar Outlook

In a shocking development - almost as shocking as the news that the wildfires were the result of arson - one Senator in Australia’s Parliament derailed the A$42 billion stimulus package because it neglected to contain provision for the Murray-Darling River system. To be fair, this area produces half of Australia’s farm products, although the focus of the plan was more on
social spending with a little infrastructure spending.

The bill will be amended and re-introduced for a vote as soon as tomorrow.

Pounds to Australian Dollars exchange rate currently 2.1983

Bye For Now

Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial

Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates! Contact IMS Foreign Exchange + 44 207 183 2790

fiscal stimulus would help Australia avoid recession

2009-02-03T08:05:00.000-08:00

Foreign Exchange - Australian Dollar Outlook :

The Australian Dollar was firm yesterday, rising off the early low of 6245 to an intraday high of 6357 on expectations of a rate cut and stimulus plan to be annoucned overnight. We expected a "buy on the rumor" effect and got it to a high of 6421 (or a 38% retracement of the previous downmove). But then the "sell on the news" effect kicked in, and the A$ sank back to 6334. The move may not be over now that the US dollar is in an overall corrective mode. We imagine the corrective move could reach as high as 6550 before it fizzles out. This is the channel top on the hourly chart and near the 62% retracement. But probably more important is the Australian Dollar vs Japanese Yen, which we don’t usually follow. It got a minor bit of support from
the announcement but its still headed for a test of the lowest-ever low of 55.08 from last October.

The hard news is that the Reserve Bank cut rates by a full 1% to 3.25%, the lowest since 1964, and announced a new stimulus package of A$42 billion, to be focussed on infrastructure with some payments to consumers. Bloomberg says the packkage includes A$12.7 billion in grants to families and low-income earners and A$28.8 billion for infrastructure. It will help send the nation’s budget into an A$22.5 billion deficit, the first shortfall since fiscal 2001-02. The earlier Oct stimulus of about AUD $ 10 billion went mostly to low-income sectors like pensioners.

Treasurer Swan said “The weight of the global recession is now bearing down on the Australian economy. Economic growth is slowing and employment will weaken.” Unemployment will probably rise from 4.5% in Dec to 7% by the middle of next year, and growth will be lucky to hit 1% at the end of the fiscla year in June. The FT reports “Mr Swan said the fiscal stimulus would help Australia avoid recession by boosting growth by 0.5 per cent in 2008-09, rising to 0.75 to 1 per cent the following year. The International Monetary Fund at the weekend forecast Australia’s economy would contract by 0.2 per cent in calendar 2009.”

Bye For Now

Barbara Rockefeller
Forex Trading Reports

Pounds to Australian Dollars exchange rate currently 2.2250

Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!

Contact IMS Foreign Exchange + 44 207 183 2790

The Australian Dollar hit a 25-year high of 98.49¢ in July and has since plunged 34%.

2009-01-30T09:41:00.000-08:00

Foreign Exchange - Australian Dollar Outlook

After the Reserve Bank of New Zealand cut rates by a mind-blowing 150 bp, the NZ
dollar exchange rate fell dramatically by over 5%. Some Foreign Exchange analysts say the Australian dollar is next, with the Reserve Bank meeting next Tuesday (Feb 3) and probably cutting rates by 1% to 3.25%. After that another 1% cut is in store to 2.25%. Bloomberg reports 3.25% would be the lowest cash rate target since targeting began in 1990 and the lowest since 1964. A Standard Chartered foreign exchange analyst predicts the Australian Dollar will fall as much as 15% by end-June or about 60¢, before recovering to 72¢ by year-end.

The Australian Dollar hit a 25-year high of 98.49¢ in July and has since plunged 34%.

Bye For Now

Barbara Rockefeller

Pounds to Australian Dollars exchange rate currently 2.2700

Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!

Contact IMS Foreign Exchange + 44 207 183 2790

Australian Rents recorded their highest increase since 1988

2009-01-29T02:48:00.000-08:00

Rent price rises at 20-year high
By Milanda Rout ,The Australian, January 29, 2009 12:00am

RENTS have recorded their highest increase since 1988 amid fears the rental crisis will only get worse as the impact of the global recession takes hold.

Latest figures from the Australian Bureau of Statistics show the annual rate of growth in rents across the country has jumped to 8.4 per cent in the year to last month, up 2 per cent from 2007, The Australian reported.

The statistics also reveal the increase in rents has jumped from 5.4 per cent to 8 per cent in Sydney, 11.2 per cent to 12.2 per cent in Perth and 8.6 per cent to 10.1 per cent in Brisbane.

Adelaide also recorded an increase in residential rental growth of 4.7 per cent to 5.4 per cent and Melbourne jumped to 6.6 per cent from 5.4 per cent.

BIS Shrapnel senior economist Jason Anderson said the rental market was only going to get worse as the country's economy faced a possible recession.

Matk Harwood of Canberra He said the roots of the rental crisis before the economic downturn were the significant increase in immigration and high interest rates that left a shortage of about 100,000 houses.

But falling interest rates were yet to have an impact on the rental shortage because construction of much-needed properties had decreased because of worsening economic conditions and higher unemployment. "This means the shortages are going to get worse over the next two years," Mr Anderson said.

"And it will probably put more pressure on the outer suburbs because that is where the cheaper rentals exist."

Mr Anderson said the rental rate increase of 8.4 per cent was well above the average 4 per cent wage increase, which made it even tougher for people facing difficult financial times.

The figures come as the rental vacancy rate decreased in Melbourne to 1.2 per cent last year from 1.6 per cent in 2007.

Read more on this at The Australian.

Pounds to Australian Dollars exchange rate currently 2.1700

Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!

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We look forward to seeing the euro exchange rate at 1.2000 before the end of March.

2009-01-20T08:00:00.000-08:00

Foreign Exchange Outlook :

Today is the inauguration of Obama and eyes will be glued to the TV most of the day, We didn't get a stock market rally on the Obama Effect and already commentators are warning that expectations are excessive - the guy can't pull a rabbit out of the hat.

The WSJ writes of the recession forecast "The bottom could be postponed if Mr. Obama's stimulus plans are hamstrung or prove ineffective. And improvement won't be lasting until bank balance sheets are repaired, clearing the way for more-normal financial markets."

We think this is exactly right.

All the tax cuts and public works projects cannot restore confidence and repair the economy until the banks are fixed. So far the consensus of opinion is that the Treasury has botched TARP, announcing it would buy toxic assets before finding out what they would cost and needing to withdraw the plan. Still, the US is activist and the US is a very rich country, and so the US dollar is getting the benefit of the doubt so far. We have been calling it the phenomenon of "it’s worse elsewhere." Events of yesterday and today are making that point.

Many commentators are trying to give the appearance of wisdom by saying that the US will have to get inflation and the US will have to face a refusal to buy its massive new paper issuance, and disapproval of giant budget deficits and a wall of debt must be US dollar negative. We say these things may turn out to be true but are not a useful basis on which to place Foreign Exchange market trades today.

It is an orientation or perspective, and not necessarily the right one. What if the US gets inflation and giant deficits but other countries get more inflation and bigger deficits?

Realistically, the folks who will make the judgment are central bank reserve managers, sovereign wealth fund managers and private fund managers like the South Korean pension manager who thinks it's time to sell US dollars. We'd bet $10 that somebody from the South Korean government has that guy out behind the shed right now. The US is the military ally and defender of the country against the Chinese and Russians, and has been since the early 1950's.

It’s not nice to say your defender's paper is junk. We expect a retraction and apology any day now. We saw it when a Japanese finance minister made a threat to withdraw from US dollar reserves back around 1997 or 1998 after a G7 meeting in the US. The poor guy had to break his trip home (in Guam) and issue the apology and retraction.

Conditions are very different with China, the biggest or second biggest buyer of US paper. Foreign Exchange Analysts are already saying that Beijing will be Obama's first stop on the usual foreign trip after the inauguration. In fact, the biggest things Obama can do in the first few weeks are

find a way to fix the banking sector without becoming the first “socialist” president
fix the housing sector and end foreclosures and
talk the holders of US Treasuries to keep holding and to buy more.

This last category includes US citizens as well as the Asians. Health, energy and reversing the damage of last-minute Bush directives are less important. Oddly, Gitmo is not leass important because it’s a symbol of the US as a nation of laws, not of men.

We keep saying that every time "it's worse elsewhere," the US dollar exchange rates benefits.

This will continue to be true until bottom gets hit, and even then, the dollar can benefit on "first-in, first out." We look forward to seeing the euro exchange rate at 1.2000 before the end of March.

Buy for Now

Barbara Rockefeller

Foreign Exchange Trading

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Australian Dollar Exchange Rate Falls

2009-01-14T08:14:00.000-08:00

Foreign Exchange - Australian Dollar Currency Update

Yesterday it was obvious on the hourly charts that some currencies had fallen too far, too fast and in too straight a line to keep going without a pause or corrective bounce. The Australian Dollar was the most glaring case, with the euro looking overdone, too. See the Australian Dollar chart. For foreign exchange trading purposes, when we see a corrective bounce coming, we guess a level where it would be safe to go short again. This time it was the previous intraday high of the previous day, or 1.3331. This time the correction went 7 points over that. Having succeeded in the guess one time doesn’t make it a good rule for every situation.

Bye For Now

Barbara Rockefeller

Foreign Exchange Trading

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Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!

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Time to buy Pounds to New Zealand Dollars?

2009-01-07T00:58:00.000-08:00

Buying New Zealand Dollars? Moving to New Zealand?

NZ commodity prices fell for the fifth consecutive month in December in a broad-based slide, a survey by ANZ Bank showed. ANZ's commodity price index fell 7.4% on the previous month, a sharper drop than in November, and was down 24.4% on a year earlier.
Commodity prices falling will be negative with NZ looking to the farming community to prop up a slowing economy.

I like buying GBPNZD - technically a well defined risk reward (target 2.80, stop 2.44) as commodity price fall flows through to the real economy in NZ and we see a dramatic slow down in spending (on a year on year basis) and further increase in unemployment.

This also plays a bounce in GBP from its currently depressed levels.

Buy for now

IMS Foreign Exchange

Reserve Bank of Australia cuts Australian Mortgage Rates 1%

2008-12-02T01:12:00.000-08:00

THE Reserve Bank of Australia has slashed interest rates by 100 basis points to 4.25 per cent.

Interest rates are now at a six and a half year low, and more cuts are on the way, economists say. CBA chief economist Michael Blythe said the RBA was likely to cut by a further 50 basis points in February. "It's a brave call to say there aren't any more rate cuts out there but you need more negative data to get large, rapid-fire rate cuts."

Last month the central bank cut interest rates by 75 basis points to 5.25 per cent. This followed on from a huge 100 basis point cut in October, and a 25 basis point reduction in September.

Most economists had tipped a 75 basis point cut today.

Minutes after the decision was announced, a spokesperson for Commonwealth Bank told news.com.au the bank would pass on the full rate cut, effective December 12. National Australian Bank followed suit, announcing it would pass on the full rate cut effective December 12, while Westpac said it would cut rates by 80 basis points. ANZ cut rates by 0.83 of a percentage point, effective December 12.

The central bank will be hoping today's rate cut encourages Australians to pull out their wallets, after data released this morning showed spending remained stagnant, despite recent figures showing that prices have started to fall.

RBA governor Glenn Stevens said although government and central bank stimulus packages had begun to take effect, global financial market sentiment remained "fragile".

"With confidence affected by the financial turbulence and a decline in the terms of trade now under way, more cautious behaviour by both households and businesses is likely to see private demand remain subdued in the near term," Mr Stevens said.

"With that outlook, and with capacity pressures now easing, it is likely that inflation in Australia will soon start to fall."

Macquarie Group interest rate strategist Rory Robertson said the RBA had, with its latest cut, reversed some six years of monetary policy tightening in just four board meetings.

Economists believe rates still have a way to fall, with some looking for a cash rate of 3.25 per cent next year. It is only the second 100 basis point rate cut since May 1992 - following a 100 basis point cut in October this year. The total 300 basis points worth of cuts since September is also the deepest set of rate cuts since early 1990, when the RBA eased monetary policy ahead of a recession.

Taking into account today's cuts, Australians will head into the Christmas season around $700 a month better off, according to experts.

Full story visit www.news.com.au

Pounds to Australian Dollars is currently 2.3255

Bye For Now

Barbara Rockefeller
Foreign Exchange Trading

Forex Trading Reports - Click for a free trialBuying Euros? Buy Euros at the best euro Rates!Buying Dollars? Buy US Dollars at the Best Dollar Rates!
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Australian Dollar falls than goes up and than goes down than it goes up

2008-11-26T14:07:00.000-08:00

Hi All

Australian Dollar falls, than goes up and then goes down, then it goes up and i am now getting very confused!!!

Today the pounds to Australian dollar rate opened at 2.3800 than went down to 2.3500 before going back up to 2.3900 before ending at 2.3300. This is getting very confusing and messy and show the importance of using limit orders to achieve the best exchange rates. today were buying Australian dollars at 2.3850 for a client which saved the client £3,459.12 or almost 2% just on the exchange rate alone.

So if you are migrating to Australia or just an expat looking for the best Australian dollar rate give us a call + 207 183 2790

Bye For Now

Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial

Buying Euros? Buy Euros at the best euro Rates!

Buying Dollars? Buy US Dollars at the Best Dollar Rates!

Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!

Australian Dollar Exchange Rate Falls

2008-11-20T13:53:00.000-08:00

Hi All,

Today had to be one of the worst days yet for the Australian Dollar after crashing by more than 4% in little over 4 hours. The pounds to Australian dollar exchange rate was last at 2.4300 after opening at 2.3300 this morning. The reason for the move is unclear but it seams like foreign exchange traders were looking to test the Reserve Bank of Australia's resolve of protecting the 0.6000 against the US Dollar.

Do we see this move strengthening the GBPAUD back to the 2.5000 level - we doubt it as Sterling has its own problems but any thing is possible against the Euro exchange rate which went from 1.95 to 2.055. But all bets are off if global stock markets continue to fall with the Detroit Bailout failing to get government approval.

On a positive note Reserve Bank governor Glenn Stevens last night stated that it was unlikely for property prices to crash do to under supply of Australian Property. On the downside getting an Australian Mortgages may be a little harder as the Australian Banks tightening the lending criteria as they have here in the UK.

exchange rate to Buy Australian Dollars currently 2.4100

Buy for Now

Damian George

Pounds to Australian Dollars at the Best Exchange Rates visit IMS Foreign Exchange

The Reserve Bank of Australia cut Australian Mortgage Interest rates by 75 bp to 5.25%

2008-11-04T07:05:00.000-08:00

Pounds to Australian Dollar Outlook: The Reserve Bank of Australia cut Australian Interest rates by 75 bp to 5.25%, the biggest of the G7 bunch and more than 50 bp forecast as well as the third cut since September. The total drop in australian interest rates is now 200 bp. Despite a visible drop in demand from China and other emerging countries, Australia will probably have only a shallow recession this year and next, so the cuts are precautionary as well as a response to dipping domestic data like retail sales.

As a general rule, rate cuts are bad for a currency. This time the Australian Dollar rose from an overnight low at 65.97¢ to 68.29¢. The question is whether it will test the recent high at 68.93 from Oct 30. We don’t have a good explanation except that traders like decisive action, presumably think lower rates will work to keep the economy humming along, and the big move in a short while may suffice, leaving the Australian Dollar as the highest yielder in a world that generally seeks carry trade yield.

Market News offers an interesting contribution. Deputy RBA Gov Battellino raised questions about further rate cuts, saying "the cycle in the Australian housing market, rather than following the US market, is in fact at a more advanced stage; it is probably leading the US market by three years or so… The Australian housing market was at its hottest in 2003, whereas the US market peaked in 2006." Battellino also mentioned a “persistent inflation overhang” that makes it harder for the RBA to manage the economy.

We say this is interesting but not useful - regardless of the condition of the housing market, Australia cannot escape global consequences, including demand destruction for commodities.

Argh well at least Australian Mortgages are falling!

Pounds to Australian Dollars currently 2.3073

Buy for Now

Barbara Rockefeller
Forex Trading Reports

Buying Australian Dollars? Buy AUD at the best exchange rates -

Contact IMS Foreign Exchange +44 207 183 2790

iPod index reflects dive of Australian dollar

2008-11-03T03:33:00.000-08:00

AUSTRALIA is the cheapest place in the world to buy an Apple iPod, according to a study to be released today, highlighting the dramatic fall in the Australian dollar in the past several months, The Australian reports.

CommSec will today release details of its "iPod index", which measures the price of an 8GB iPod nano in 62 countries to compare currencies.

CommSec chief economist Craig James said Australia had jumped to the cheapest spot after being placed 14th cheapest in July. An 8GB iPod costs $US131.95.

In July, a 4GB iPod (then considered the entry-level product) cost $US181.50.

"It's quite remarkable, we are the cheapest by a long way," Mr James said.

"Our currency has fallen dramatically."

It would be about 25 per cent cheaper for a British tourist to buy their iPod in Australia, rather than at home, Mr James said.

But while having an Australian dollar at US65c-67c was good news for manufacturers and other exporters as well as the tourism industry, Mr James said the iPod index shows the Australian dollar may have fallen too far too quickly.

Read more on this story at The Australian.

Pounds to Australian Dollars currently 2.3800

Reserve Bank of Australia intervened today and were looking to Buy Australian Dollars

2008-10-28T01:45:00.000-07:00

Bloomberg reports that the Reserve Bank of Australia intervened today and were looking to Buy Australian Dollars, following a similar intervention on Friday. The only comment we have from the RBA is that the bank “provided more liquidity to the foreign exchange market.'' We don’t even know the name of the spokesman, let alone the amount. The NKS says “Foreign Exchange Traders said the bank's entry level was US$0.6125. Yet, as of 0550 GMT, the pair is even lower at US$0.6088.” The RBA confirmed the Friday intervention on Sunday, perhaps hoping to scare of Foreign Exchange traders when the market opened on Monday. It didn’t work.

Pounds to Australian Dollars currently 2.5100

Buy For Now

Barbara Rockefeller
Forex Trading Reports

Buying Australian Dollars - Get the Best Exchange Rates visit IMS Foreign Exchange

This is probably going to go down in Foreign Exchange history as one of the dumbest trades ever

2008-10-23T09:14:00.000-07:00

Australian Dollar Outlook

We were wondering about the bizarre behavior of the Australian Dollar exchange rate on some days in recent weeks.

Now we may have an explanation.

According to the WSJ, Citic Pacific, the bluest of the blue-chip Chinese companies in Hong Kong (called, naturally, a red chip), could lose HK$15.5 billion (US $2 billion), and possibly more, because of leveraged positions on the Australian dollar. Citic has a big investment in an Australian mining company.

The WSJ says “the mining investment requires the company to buy equipment and supplies in Australian dollars. It isn't unusual for companies to hedge their foreign currency exposure. But Citic Pacific did something more: It turned to structured products dubbed "accumulators" that obligated it to buy a specified amount of Australian dollars"

In this case, about nine billion Australian dollars (US$6.1 billion at current exchange rates), at a fixed price.

“The Australian dollar's sharp downturn in recent months, a side effect of the global credit crunch, has left Citic badly exposed. Already, the bets have cost the company HK$807.7 million in realized losses and would cost it HK$14.5 billion more if they were marked to market at current values. Because Citic Pacific retains open positions, the losses could deepen if the Australian dollar continues to slide against the U.S. dollar.”

Bloomberg says CITIC stock fell 66% since the disclosure on Oct 20. It has “four times more money riding on the Australian dollar than it earned last year… [with a commitment] to buy as much as A$9.44 billion … at an average price of 87 U.S. cents. The currency traded at 66.72 cents as of 7:54 p.m. in Sydney” today. This is probably going to go down in Foreign Exchange history as one of the dumbest trades ever, along with VW and Bank Negara from the 1980’s.

Pounds to Australian Dollar exchange rate is currently 2.4473 and i you need to Buy Australian Dollars a good level at present is 2.4800 if you can get it

Buy for Now

Barbara Rockefeller
Forex Trading Reports - Click here for a free trial

Buy Australian Dollars at the best exchange rates visit IMS Foreign Exchange or call +44 207 183 2790

Australian Dollar starts slow and improves aganist the Pound

2008-10-20T11:06:00.000-07:00

Hi All,

The Australian Dollar is staying very volatile with the AUD exchange rate but showed a lot of fight late today climbing back over the 0.7000 against the US Dollar and the pounds to Australian Dollar exchange rate heading back to 2.4300 which was last weeks low.

The range on the pounds to Australian dollars range is what is alarming me the most as we started the day at 2.5100 and almost 3% lower. These ranges are normally what emerging currencies trade per day, not the humble Aussie dollar. Seams to me that the idea that Australia is a commodity currency and as the world slips into a recession the Australian economy is going to suffer is the main story - but wait the Australian Government hasn't yet to bail out a bank never mind 3-4 banks, our housing market is starting to pick up, you can still get a mortgage.

If I was a gambling man and it is fair to say i am by the nature of my job, the Australian Dollar may weaken yes! but against the US dollar, Swiss Franc, Euro and Japanese Yen, not against the Pound. The UK seams to be rewarded for the prompt action of the British Government rather than a sound economy!

The UK economy is one built on sticks - the banking sector delivered record bonus after record bonus that helped fuel London property prices and helped the economy boom. But what is going to happen now those bonuses are gone and the Governments non-dom tax hits home? Bankers and those in Hedge Funds are leaving the capital and those staying are going to rein things in. Money is leaking out of the loop fast and it will filter down the chain even faster as the banker earning £300k lets his nanny, cleaner and Aston Martin go as their income comes back under £60k as banks fail to pay bonuses this year. And this is only one industry the follow on effects will be huge!!!

Take care when you Buy Australian Dollars not to be to greedy the - remember that the exchange rate only 2 weeks ago was almost 2 to 1 and 2.5 to 1 is the bargain of the year as the Australian economy proves jow robust it actually is.

Good Luck and buy for now

Damian George
IMS Foreign Exchange

Buying Australian Dollars call for the best exchange rates + 44 207 183 2790

Australian Mortgage Interest rates heading lower - Australian Dollar Outlook bleak

2008-10-16T09:16:00.001-07:00

Hi All,

Looks like the Australian Dollar exchange rate is set for another tumble as experts suggest that the Reserve Bank of Australia needs to cut rates further to fend off the "r" word. Macquarie Group interest rate strategist Rory Robertson was quoted in news.com.au that interest rates will be as low as 4.25% by next year.

Whilst this is good for picking up Australian property prices and Australian Buliding Industry which has been extremley slow, but this is not ultimately what the RBA seams concerned with. what seams to be the bigger worry is the high level of consumer debt and slowing growth in Australia which is now at alarming levels. (Even inflation is on the back burner for the time being.)

"As the financial conditions continue to deteriorate, the Reserve Bank is becoming increasingly worried about the outlook for growth," Mr Robertson said. "So the Reserve Bank is cutting aggressively to limit the risk of recession in Australia."

But enough of this doom and Gloom what this means for many of us in the UK is that if you are migrating to Australia you are now looking at a much better rate to buy Australian dollars and if you are an Australian expat you have now have a chance to buy and home and send money home at a much better AUD exchange rate

Pounds to Australian dollars currently 2.5800

Regards

Damian George

Need to buy Australian Dollars call IMS Foreign Exchange for a free quote +44 207 183 2790

Australian Dollar fell out of favour today after yesterday’s brief rally

2008-10-15T11:02:00.000-07:00

Hi All,

The Australian Dollar fell out of favour today after yesterday’s brief rally. It appears the world got ahead of itself and realised that the sky is still falling and there is now a rush to “safe” money mainly US Dollars, Euros, Pounds and Japanese Yen.

Being the loyal Australian I am, I am finding this very difficult to understand why the market keeps selling Australian Dollars at every point but sometimes things done make sense even though you want them to. If you are migrating to Australia this really doesn’t matter too much.

Look for the Pound to Australian Dollar exchange rate to say in the 2.48-2.58 range until something else happens.

Good news for those wanting to sell Australian Property – the new bailout package and first home buyers grant increases are working and 1st home buyers are re-entering the market and will hopefully push prices up, stimulate investment in Australia and boost the Australian building industry. (Good to see also 1st home buyers can get a Australian mortgage - unlike the UK.)

Pounds to Australian dollars exchange rate currently 2.5500

Regards

Damian

Need to Buy Australian Dollars? Best Australian Rates visit

IMS Foreign Exchange or call +44 207 183 2790 for a free quote

Australian Dollar Exchange Rate fights back against the Pound but Outlook suggests further Falls

2008-10-09T10:58:00.000-07:00

Hi All,

The Pound to Australian Dollar exchange rate yesterday saw one of the most surprising rally's I have ever seen as the Dollar exchange rate went from 2.2700 to 2.7200 almost a 20% jump. The question everyone is asking is;

Why did the Australian Dollar fall by so much?

Simple answer the global economy is in melt down and foreign exchange traders around the world are having to take off complex carry trades which are bets on interest rates and now heading to the safe haven of US Dollars, Swiss Francs and Japanese Yen.

(The Australian Dollar and the New Zealand Dollar for the matter has been used as a high yielding currency and traders have been borrowing from Japan by buying Japanese Yen which current interest rate is 0.5% and investing in the Australian and NZ market at 7%+. )

Before you rush to buy Australian dollars there is further risk these trades will drag the Australian Dollar to US Dollar back to the 2001 levels 0.4775 this will correlate to a Pound to Australian Dollar Buy Rate of around 2.900/3.000 a level that most people didn't expect to see this year or next for that matter.

Traders will watch technical levels on the Australian dollar today, said Westpac's Rennie. The currency closed below 67.15 U.S. cents yesterday, a 61.8 percent retracement from its April 2001 low to a July 2008 high, according to a series of numbers known as the Fibonacci sequence. The close below that level could "open up a deeper sell- off and a long-term target to the 2001 lows at 47.75,'' wrote London-based Kevin Edgeley, a technical analyst at Goldman Sachs Group Inc. in a research note dated Oct. 8. source Bloomberg

So if you are migrating to Australia or just an expat sending money to Australia enjoy the bonus of a global meltdown/credit crisis - you are one of the very people that we benefit from the current market conditions.

Buy for now

Need to buy Australian Dollars at the best rate

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Pounds to Australian Dollars now 2.5500 - why is the AUD outlook so bad?

2008-10-08T00:21:00.000-07:00

Australian Central Bank last night expanded the liquidity assistance it provides commercial banks in its daily money market operations. The Reserve Bank of Australia (RBA) said it would ease restrictions on the types of residential mortgage back securities (RMBS) it will accept as collateral for loans. It will also offer 6- and 12-month repurchase agreements each day in its operations, essentially lending for longer periods.

The Australian Dollar again came under selling pressure across the board and is down 3% against most currency crosses today. Seams like we are shooting the messenger as the Australian Central bank seams to be acting responsibly compared to the ECB and the Bank of England.

Pounds to Australian Dollars exchange rate currently 2.5600

Commonwealth Bank of Australia buys BankWest

2008-10-07T23:42:00.000-07:00

Commonwealth Bank of Australia has agreed to buy British bank HBOS's Australian unit BankWest for A$2.1 bln, to boost its market share in fast-growing Western Australia. CBA said it would raise A$2 billion of Tier 1 capital in an institutional placement of securities to help fund the BankWest deal.

Well good on the CBA buying what i always thought was one of Australia's best banks - seams the biggest loser out of the credit crunch is the customer as choice and competition is disappearing out of the market. All we need now is a Crude Oil crisis and Shell and BP can merge funded by the tax payer and they can return billion pound profits.

This is just one big mess

But on a positive note if you are migrating to Australia the pounds to Australian Dollar exchange rate has rallied yet again today and you can Buy Australian Dollars at 2.5500

Buy for now

IMS Foreign Exchange

Pounds to Australian Dollar now 2.4800

2008-10-06T11:52:00.000-07:00

Hi All,

To everyone's surprise the Pounds to Australian Dollars exchange rate has rallied to the highest point this year. That GBPAUD Exchange rate is currently 2.4880 from 2.2800 a change of 9% change on the day, almost unheard of in the world of foreign exchange. I am at a loss to explain the massive change in the AUD exchange rate but the general sentiment is that it is outright panic and foreign exchange traders are running to the safe havens on the Swiss Franc and the Japanese Yen. ( Is the Australian Banking System really that bad shape that traders are scared about borrowing from Japan to invest in Australian government back bonds at 7% or 6.5% after the interest rate cut - it appears so)

Although the Reserve Bank of Australia is expected to cut Australian interest rates by 0.50% this response is ridiculous and I expect the the Australian Dollar to come back to the 2.3000 level shortly which is more realistic as the Bank of England. What has made matters worse is that there is Public Holiday in Oz that is leading to extremely thin trading conditions and exacerbated the move.

But for those of you in the UK thinking about emigrating to Australia or paying off an Australian Mortgage it is music to your ears as being in the UK makes sense again.

Dont be foolish - is you are buying Australian Dollars you have been given a gift horse here - Buy Australian Dollars while you can at these levels - when normality returns so will the Australian dollar strength.

Buy for now

IMS Foreign Exchange - Click here for Australian Dollar Trading Reports

Buy Australian Dollars at best rates - call 0207 183 2790 for a free quote

Australian Interest Rates to Fall, But not Mortgage Rates

2008-10-01T04:35:00.000-07:00

Hi All,

Seams like the Reserve Bank of Australia is set to cut interest rates on the 7th October but word is out that the big four Australian Banks (Commonwealth Bank, NAB, Westpac and the ANZ) will not be passing on anyt of the interest cuts due to the current credit crisis and increased funding costs.

We have written about this in the past about the greed of banks but nothing has been done to date and the current Australian Government seams to have riased the white flag on this issue with Wayne Swan the current Australian Treasurer conceeding that;

"What we have seen in recent weeks is a very big spike in borrowing costs internationally and that will certainly have an impact on domestic institutions. I am not going to speculate about what the Reserve Bank will do next week, but we do know when borrowing costs go down rates should follow. Of course, the reverse also happens - when borrowing costs are pushed up and, particularly pushed up sharply, that has consequences."

And while Opposition Leader Malcolm Turnbull disagreed saying banks should pass on the full amount i believe this is more of a voter pleasing stance rather than political view point as he has nothing to lose in this argument.

So there you are, good news - those needing a Australian Mortgage the RBA is going to cut interest rates! Bad News is - Greedy Australian banks are not going to be cutting Australian Mortgage Interest Rates! - Super

Pounds to Australian Dollars currently 2.2370

Buy for Now

IMS Foreign Exchange - need to buy Australian Dollars call 0207 183 2790

RBA to Cut Australian Interest Rates by 0.5%

2008-09-30T08:14:00.000-07:00

The Australian Dollar exchange rate is the worst performer of the major foreign exchange crosses, down from 85.9 last week to 7925 late yesterday on a series of negatives, not least of which is crashing commodity prices. In addition, global recession in Australia’s big Asian markets can’t be too far behind, suggesting a second wave of expected fear. The domestic data suggests the slowdown already has a grip, with Australian mortgage lending at the slowest pace since 1986 and building approvals down for a second month. RBA Gov Stevens already said the economic expansion is decelerating, and the consensus outlook is for a interest rate cut by a big 50 bp at the Oct 7 policy meeting.

According to Bloomberg, Australian government bonds rose and the yield on the 10-year note fell 27 bp to 5.397%, the lowest since March 2006.

Pounds to Australian Dollars exchange rate currently 2.2500

Buy for Now

Barbara Rockefeller - Forex Trading Reports

Buying Aussie Dollars contact IMS Foreign Exchange

Australian Banks make Record profit whilst the rest of us suffer

2008-09-24T10:26:00.000-07:00

Hi All,

another interesting article today in the The Australian about Australian Banks. It seams that whilst they have been crying poor and lifting interest rates above the Reserve Bank of Australia official cash rate and inflecting mortgage hell on the rest of us they have increased profitability to 1 Australian Dollar per every 2 Australian dollars earned.

The four pilliars of the Australian Banking system Commonwealth Bank, National Australia Bank, ANZ and Westpac all lifted their mortgage rates by more than the Reserve Bank.

This just isn't fair - the banks are clearly just raising profit margins and blaming the credit crunch. Has anyone noticed an increase on the interest paid on savings accounts - i dont think so.

Bye for now

IMS Foreign Exchange

Emigrating to Australia and need to Buy Australian Dollars? Best Australian Dollar Exchange Rates visit www.imsfx.co.uk

Sydney Rent Prices to Soar as Australian Dollar tumbles

2008-09-24T09:11:00.000-07:00

Hi All,

found an interesting article today in the Australian News about rent prices in Sydney that may interest those expats moving back to Australia or those of you migrating to Australia

Landlords warned on rent hikes

The story highlights the chronic shortage of Australian Property at the moment and whilst Sydney is experiencing falling house prices, rental yields are going through the roof due to lack of investors in the buy to let market, low affordability of Australian homes for first home buyers, and the credit crunch and higher interest rates taking hold of those coming off fixed term mortgages faced with the real possibility of repossession of the family home.

The Sydeny rental market was like this after the 2000 Sydney Olympics but that is when people could borrow money freely and what resulted was a property boom of epic portions,

Do we expect the same to happy in 2008 - i don't think so - finance is only available for the cash rich.

Read the story and please leave comments on the blog to get a bit of a chat going for us Australian Expats living in London

Buy for Now

IMS Foreign Exchange - Visit us to Buy Australian Dollars at the best exchange rate

Australian Dollar exchange rate falling against both the US dollar and Pound

2008-09-16T00:49:00.000-07:00

Hi all

The Australian Dollar is coming under further selling Wall Street tumbles after the Lehman Brothers news yesterday. The Australian Dollar to US Dollar exchange rate was trading below 0.8000 at 0.7850 which is music to the ears of Australian Exporters but will only push up prices further and help fuel inflation which the Reserve Bank and Australian Government are very concerned with.

Australian Prime Minister Kevin Rudd tried to boost confidence yesterday saying that the govt is in talks with the RBA regarding the Wall St crisis. Adds that the global crisis has a "long way to run yet." But the words where not heard by foreign exchange traders who still continue to sell the dollar.

Personally i can see the Australian Dollar exchange rate falling against both the US dollar and Pound to the 0.7350 and 2.3500 level in a very quick time as may FX traders would be sitting on large profits or get out of old losing positions.

Be very cautious with the Australian dollar - it has been know to bite back as i have found out personally many times

Bye for Now

IMS Foreign Exchange

Need to Buy Dollars - Best Australian Exchange Rates visit our site www.imsfx.co.uk

Pounds to Australian Dollar Exchange Rate tumbles

2008-09-16T00:38:00.001-07:00

Hi All

Last night the Australian Reserve Bank realease it minutes of its last meeting - in short they have stated that the central bank had to cut interest rates this month to avoid the danger of a sharper economic slowdown than necessary, though policy could still need to be restrictive for some time to bring inflation down from 17-year highs.

The news wasnt taken that we by foreign exchange traders and the Australian dollar was dealt a fast swift blow and the Pounds to Australian Dollar exchange rate is now trading 2.2750, great news if you are migrating to Australia or live in the UK with an Australian mortgage like me.

Dont get to excited though the comments where meant to suggest that there will be now need for future rate cuts, although I theing the Australian Interest rate outlook is interest rates back in the 6% band as the Australian Housing market is still suffering and is also one of the countries biggest employers and the australian government needs it firing to keep employment down and GDP up.

Bye for now

IMS Foreign Exchange -

Please contact us for the Best Australian Dollar exchange rate

Currency Traders Sell Australian Dollars

2008-09-11T03:55:00.000-07:00

The Australian dollar has closed below 0.8000 against the US Dollar for the first time in more than a year as a surprise drop in the jobless rate failed to give the currency a sustained boost.
A bigger than expected New Zealand interest rate cut drained momentum from the Australian dollar as foreign Exchange traders dumped high-yielding currencies.

The Australian dollar was trading at $US0.7954/57, down from yesterday's close of $US0.8075/79, marking the third successive weaker finish. This was the unit's lowest closing level since August 17, 2007 when the Australian dollar finished at $US0.7741/47.

During the day, the local currency traded between a late morning low of $US0.7945 and an early afternoon high of $US0.8020. The Australian dollar finished below 86 Japanese yen for the first time since July 2006.

The domestic currency struggled after the Reserve Bank of New Zealand cut interest rates this morning by a bigger than expected 50 basis points, taking the cash rate to 7.5 per cent.

"The Aussie dollar did open up this morning under pressure, tracking the Kiwi dollar,'' Easy Forex currency dealer Anthony Botros said. "It's been a concept in the market that because they're neighbouring currencies they do tend to track each other.''

The Australian dollar rose above $US0.8000 in late morning trade from its daily low, after Australian Bureau of Statistics data showed the jobless rate in August falling by 0.2 percentage points to a five-month low of 4.1 per cent.

The seasonally adjusted data was better than market forecasts of a 4.4 per cent unemployment rate for last month, and helped the Australian dollar step above $US0.8000. Mr Botros said traders saw the noon rally as a chance to sell the Australian dollar.

"The (labour market) figures were relatively good but they don't show much of a correlation to recent commentary from the Reserve Bank regarding ... a slowing economy even though interest rate easing will be subdued,'' he said.

Reserve Bank of Australia governor Glenn Stevens told a parliamentary economics committee on Monday that he expected the jobless rate to rise above five per cent in the next 12 to 18 months as the economy slowed.

For the full story visit news.com.au

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Reserve Bank of Australia cut rates today by 25 bp to 7%

2008-09-02T12:35:00.000-07:00

The Reserve Bank of Australia cut rates today by 25 bp to 7%, as expected but a bit earlier than some had forecast. RBA Gov Stevens said overall economic slowdown should help inflation fall back to the desired 2-3% level from 4.5% today. The WSJ reports the move is the first cut since Dec 2001 and starts the unwinding of the twelve rate hikes that started in May 2002. Australia reports Q2 GDP tomorrow, probably 0.4% q/q and 2.9% y/y.

Pounds to Australian Dollar exchange rates 2.1300

bye for now

IMS Foreign Exchange

Australian Dollar falls again

2008-08-26T03:20:00.000-07:00

The Australian Dollar lost almost one US cent today to close at its lowest point this year.

The Australian Dollar was trading at 85.61 US cents, down from yesterday's close of 86.53 US cents.

It is the second time this year the Australian dollar has closed the local trading day below 86 US cents, closing even lower than the previous 85.95 cents finish on January 22.

Commonwealth Bank currency strategist Joseph Capurso said a stronger US dollar was the major factor behind today's fall.

The Australian dollar has lost 13 per cent since hitting a 25-year high of 98.49 US cents on July 16 - levels not seen since the days of a fixed exchange rate.

Mr Capurso said the decline was one of the fastest in the currency's history, having slid in almost a straight line since.

"As soon as it hit that, it's spent most of the time falling," Mr Capurso said.

"It's been one hell of a fall for the Aussie dollar."

Mr Capurso said he expected it to be buoyed by new economic data over the next fortnight, and described the slide as temporary. "We think the market is going to be surprised about the resilience of the Australian economy, so we think that the Aussie will find some support," Mr Capurso said. Commonwealth Bank has forecast the dollar to reach 90 US cents by December.

Full story at news.com.au

Pounds to Australian Dollars exchange rate is currently 2.1500

Good news for those with Australian Mortgages

2008-08-19T02:15:00.000-07:00

What can be only seen as good news for those with Australian Mortgages or the need to Buy Australian Dollars the Reserve Bank of Australia gave the strongest indication that interest rates will be cut in the coming months.

Today the Pounds to Australian Dollar exchange rate is trading at 2.14000 to Buy Australian Dollars

THE minutes of the Reserve Bank's August board meeting have all but confirmed there will be an interest rate cut next month.

But the minutes gave little encouragement to market speculation that the central bank could cut the official cash rate by 50 basis points, economists say.

The minutes of the meeting, at which the cash rate was left unchanged at at 12-year high of 7.25 per cent, said "a case could be made for an early reduction in the cash rate".

Board members were conscious that financial conditions were "clearly quite tight and effectively getting tighter as a result of ongoing pressure on lenders cost of funds in the market", the minutes said.

"Given there had been a significant change in borrowing behaviour, confidence was weaker, asset prices had declined and slower overall growth was in prospect, tighter financial conditions were not warranted," the minutes said.

"Indeed, less restrictive conditions could soon be called for, otherwise the risk of a deeper and more persistent slowing in the economy would increase."

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The Australian Dollar continues to struggle

2008-08-15T06:27:00.000-07:00

The Pound to Australian Dollar exchange rate continued its march towards 2.2000 as gold prices fell below the $800 mark for the first time in years, the expectation that the RBA is going to cut interest rates soon and that Foreign Exchange Traders are dumping their carry trades (selling Australian dollars and buying back Japanese Yen) a very similar story to what is happening to the New Zealand Dollar.

This is good news if you are going to buy Australian dollars in the coming weeks as the 2.20/2.30 becomes an achievable exchange rate again and no longer seems like a pipe dream it did only 6 weeks ago. Foreign Exchange markets do deliver swift justice.

Although there is no good news for the Pound which looks like it is heading below 1.8000 and may even head towards 1.7000 to 1.6500 as the endless bad news fails to hault the selling.

If you do need to Buy Australian dollars and looking for the best exchange rate

contact us and we will help you achieve the best exchange rate possible

Bye for Now

IMS Foreign Exchange

Australian Dollar fights back against the Pound

2008-08-13T07:37:00.000-07:00

The Pound to Australian Dollar exchange rate hit a high of 2.2000 last night almost a 10 percent improvement of the years low. But for Expats and those migrating to Australia the relief was short lived as the Pound continues to crumble due largely to Pound to US Dollar exchange rate playing catch up to the recent moves in other currencies against the US Dollar and worsening economic conditions plummeting as inflation hits 5 percent. Added to the Pound's woes was Barclay's announcement today that it has moved forward its time frame for the Bank of England cutting rates later this year as the UK economic conditions continue to weaken .

We tend to agree with Barclay's that if Bank of England stays focused on inflation - growth and consumer confidence will tumble and the recession will become a certainty.

In Australian local financial news the Commonwealth Bank of Australia announced its annual profit by 7 per cent and forecast the local economy to grow modestly amid continued headwinds from the global credit crunch.

Net profit for the year ended June 30 rose to $4.791 billion while the bank's preferred measure of profitability, cash earnings, rose 4.6 per cent to $4.733 billion.

Yet again banks not understanding why we complain about services, fees and interest rates on our Australian Mortgages. They seem to be oblivious to the consumer and the consumers needs.

A rant for another day.

If you would like a free quote to Buy Australian Dollars at the best rate

Please visit IMS Foreign Exchange

Australian Dollar has fallen for 11 straight days

2008-08-12T05:46:00.000-07:00

The Australian Dollar has fallen for 11 straight days for the longest losing streak since 1975 and to a 6-month low, according to Bloomberg. It is losing ground not only because of commodity price declines, but also the outlook for further Australian Interest Rate Cuts.

Bloomberg says “The Reserve Bank of Australia said yesterday that a ‘significant moderation’ in domestic demand would give it room to lower borrowing costs…

Foreign Exchange Traders are certain the RBA will lower its 7.25pc base interest rates by at least a quarter-percentage point when it meets next on Sept. 2,” according to the Credit Suisse swap analysis. The RBA will cut by a total of 97 bp over the next 12 months, or effectively 1%. In July, the analysis called for cuts of half that.

This makes the Australian Dollar less desirable against its commodity-currency competitor, the Canadian dollar, where policy decisions are more closely tied to those in US and thus already at relatively low interest rates.

Bye for Now

Barbara Rockefeller

For the best exchange rates when Buying Pounds to Australian Dollars visit

IMS Foreign Exchange

Australian Dollars Fall

2008-08-12T05:23:00.000-07:00

The Reserve Bank of Australia’s quarterly statement on monetary policy yesterday hinted that the RBS is finished hiking interest rates and in fact now looking towards maybe cuting the Australian Base Interest Rates in the coming months which will be a relief to those who have or want a Australian Mortgages.

The fall of the Australian Dollar has been fairly spectular as the Pounds to Australian Dollars exchange rate has gone from 2.0200 to 2.1757. If it goes through the 2.18/2.200 level we could see the Australian Dollar fall off a cliff and head back towards its natural comfort zone of 2.5000 which would make all the british expats including this one very happy.

Pounds to Australian Dollar exchange rates is currently trading 2.1708

Bye for Now

IMS Foreign Exchange

Australian Interest rates kept on hold, cuts predicted

2008-08-05T06:57:00.000-07:00

Interest rates kept on hold, cuts predicted

AS expected, the Reserve Bank has kept official interest rates steady today at a 12-year high of 7.25 per cent, in line with expectations. The decision was widely tipped, with all 19 economists surveyed by AAP expecting the RBA to leave the cash rate steady.

Reserve Bank governor Glenn Stevens indicated in a statement that while the board felt it was appropriate to keep rates steady this month, relief could be in sight.

"Weighing up the available domestic and international information, the board judged that the cash rate should remain unchanged this month. Nonetheless, with demand slowing, the board’s view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing," he said.

Interest rates 'won't go higher' ANZ chief economist Saul Eslake said the statement give a clear impression that interest rates have peaked. "That's an indication not only that there aren't going to be any more increases in interest rates but raises the question of when do they cut," Mr Eslake said. "The statement does not give any clues as to when that might be."

The central bank reaffirmed its forecast for inflation to fall back within its 2 to 3 per cent target band during 2010. Mr Eslake said moves this year by commercial banks to raise their borrowing rates independently of RBA decisions has been a "critical factor altering their thinking" about the economy.

"Additional rises in market interest rates and tougher credit standards have delivered some additional tightening of financial conditions without them having to lift a finger," Mr Eslake.

"That's clearly had some impact on the economy."

Rates cut by Christmas?

Lehman Brothers chief economist Stephen Roberts said Mr Stevens' statement about a "less restrictive" monetary policy stance had increased the possibility of an interest rate cut by the end of 2008.

"There could be one by Christmas - they're going to wait for more data," he said.

"They've got an easing bias but there's no timing on that ... they're not in a particular rush to change.

"They talk about uncertainty weighing on both inflation and growth."

Mr Roberts, who is forecasting rate cuts in the March quarter, said the RBA would not move on interest rates until at least after the October 22 release of September quarter consumer price index data.

"They did talk about inflation remaining high in the short term, but on balance economic growth remains subdued," he said.

But the banks aren’t necessarily listening. Commonwealth Bank chief executive Ralph Norris last month refused to guarantee that CBA would cut interest rates if official rates were cut.

Full story at news.com.au

The Australian Dollar has lost a lot of ground against the pound at the moment falling from 2.0500 to 2.1200

if you need pounds to australian dollars at the best exchange rate or a Australian Mortgage

contact IMS Foreign Exchange

Australian Interest Rates unchanged

2008-08-05T02:05:00.000-07:00

The Reserve Bank of Australia as expected left Interest Rates unchanged at 7.25 percent last night breathing a sigh of relief from those with an Australian Mortgages. Australian Housing prices have taken a tumble over the last few months and with the commodity boom seaming to be coming to an end many hoped the RBA would actually cut interest rates and provide a soft landing and slow the economy rather than let it head to a recession.

A summary of the main points are as follows from its policy statement;

There has been substantial tightening in financial conditions.

Scope to move towards less restrictive policy.

Considerable uncertainty surrounds outlook.

Looking more likely that demand will remain subdued.

Inflation likely to decline over time.

Tightening in conditions, rising fuel costs, lower asset value restrain demand.

If you are looking to Buy Australian Dollars and want the best exchange rate please

contact us at IMS Foreign Exchange

Pounds to Australian Dollars currently 2.1294

Pounds to Euros currently 1.2625

Pounds to US Dollars currently 1.9583

Canadian Dollar was overvalued at $1.00

2008-08-04T11:46:00.000-07:00

Foreign Exchange Traders are scrambling for reasons why the Canadian Dollars and Australian Dollars exchange rates are so weak. One idea is that carry-traders are feeling risk averse and reducing activity. Another idea, and one we like better, is that commodity prices are falling, whether we want to see it as bursting bubbles or not. Behind the drop in commodity prices is slowing demand from the US (affecting the CAD) and from China (affecting the AUD). Bloomberg notes that 54% of Canadian exports are commodities such as gold and oil, and the rest of the economy is dependent on the US, too. Canada’s growth will be only 1-1.5% this year, less than the US.

The Canadian Dollar was overvalued at $1.00 and still overvalued at 98 cents.

Australian biggest six-month fall in wealth since the 1982-83 recession.

2008-08-04T01:33:00.000-07:00

Alarm over fall in wealth

TUMBLING share markets and sliding property prices have produced the biggest six-month fall in wealth since the 1982-83 recession. The fall in wealth comes as income growth has stagnated and is expected to cause consumer spending to remain weak into next year. However, Finance Minister Lindsay Tanner called on people tipping a recession to take a reality check, saying the economy was still in good shape, even though it was slowing. "It's crucial that we don't get spooked by one or two bad sets of figures," he said, ahead of the Reserve Bank board meeting tomorrow. He said the budget tax cuts andthe continuing resources boom would keep the economy "ticking along".

"Yes, the economy is slowing, yes, we need to take the steam out of inflation, but people talking recession are getting way ahead of the facts."

However, economists say there is a growing number of indicators showing the economy is in danger of contracting. Investment bank ABN-Amro estimates that average wealth fell by 5 per cent in the first half of this year. The bank's chief economist, Kieran Davies, said declines in wealth were unusual, with the decline in the early 1980s the only time since World War II when wealth dropped more rapidly than in the past six months:

"The rapid decline in wealth is another series that can be added to the already long list of indicators that are behaving as if the economy is on the edge of, or in, recession."

The value of household financial assets fell by 6.6 per cent in the March quarter as share prices plummeted and by a further 1.25 to 1.5 per cent in the June quarter.
Housing accounts for about two-thirds of household wealth and is also slipping in value. Preliminary estimates suggest that housing prices fell by about 2 per cent in the second quarter.
Mr Davies said the fall in wealth this year contrasts with the 11 per cent growth in the value of household assets last year.

Households traditionally spend a portion of increases in wealth, and cut back when it falls.
Mr Davies said there was a possibility spending could decline by 1 per cent. He said rising interest rates and inflation had also brought growth in disposable income to a halt, after rising at a rate of 8 per cent last year.

He said this year's tax cuts should lift income by about 1 per cent, but the underlying trend showed no growth.

Although financial markets expect the Reserve Bank to deliver its first cut to interest rates in September, most economists believe it will take longer for the bank to act.

A survey of private sector economists conducted by Reuters found that only 8 out of the 21 it asked expected rate cuts this year, with only a 30 per cent chance given to a cut by September.
All but one of the economists expect the Reserve Bank will have cut interest rates by this time next year.

The Reserve Bank may want to see some evidence that the slowdown is affecting the labour market before concluding that the threat to inflation from an over-stretched economy has eased.
Employment figures for July will be released on Thursday, with economists tipping a small increase in the unemployment rate to 4.3 per cent.

Full story at The Australian

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Pounds to Australian Dollars currently 2.1100

Australian Dollar fell

2008-08-01T09:17:00.000-07:00

The FT reports that the Australian Dollar fell on reports in the Australian press that the Reserve Bank of Australia would seriously consider cutting interest rates after its policy meeting next week.

The Australian Dollar was also hit by a fall in the Chinese purchasing managers’ index, which dropped below the 50 level that suggests contraction for the first time on record. Analysts said this was evidence that rampant Chinese demand for Australian commodities might have peaked.

The Pound to Australian Dollars today took a battering and the best australian dollar exchange rate is currently 2.1176