Daily Archives: May 1, 2018

RBA interest rate decision- Rates look set to continue on hold for the foreseeable future

If comments from the RBA last night are anything to go by it does look like we may be set for stable interest rates for the foreseeable future, despite the fact that we have had a record breaking period of policy stability in recent times.

For the last 19 meetings we have seen no rate movements which now dates back to a stable interest rate since August 2016, in the meantime we are starting to see interest rates for other economies around the world begin to rise, which is why the Australian Dollar has weakened against a number of major currencies over the past year or so.

For those that are not aware an interest rate hike is generally seen as positive for the currency concerned as it will make that currency more attractive to investors, so due to the fact that we have not seen a rise in rates and one does not appear to be on the cards the Australian Dollar has started to lose value, making it cheaper to buy.

Until the RBA gain more confidence in wage growth  and labour market conditions in general then I feel that they will not budge on their stance, they admitted today that employment growth has slowed and that this is one of the reasons why they are still approaching any rate changes with caution.

Some analysts are now predicting that we may not see a move from the RBA until 2020 at the earliest, and with this in mind I personally feel that the Australian Dollar may be set to struggle in the months ahead, especially if you add into the picture falling commodity prices and a lower attitude to risk from investors at present.

If you have the need to make a large currency transfer involving the Australian Dollar, either buying or selling and you would like my assistance both with the timing and achieving the best rate when you come to lock in your rate then you are more than welcome to contact me personally.

You can email me (Daniel Wright) on djw@currencies.co.uk with a brief description of what you need to do and I will do my best to help you.

RBA Keep rates on hold (Daniel Johnson)

RBA Interest Rate Outlook does not bode well

There were no surprises during the early hours as the Reserve Bank of Australia (RBA) decided to keep rates on hold at 1.5%. The RBA stated the need for consistent and sustainable growth before a hike would be considered. I am of the opinion it could be 2019 before a hike. The Aussie has suffered as a result.

GBP/AUD – The Pound had made significant advances following  a host of positive data, but this was followed by some very poor figures. Some have attributed the fluctuations to the beast from the east weather conditions although there is concern there could be serious problems with the economy in general. There was widely expected to be a rate hike from the Bank of England (BOE) in May, but following the worst GDP figures for five years last week this could well be put on hold.

Despite this, I think current buoyancy levels between 1.80-1.85 will remain. The big picture is that Sterling is chronically undervalued and GBP/AUD is only at current levels due tot he uncertainty surrounding Brexit. Clarity on the matter will strengthen the pound, keep in mind pre-Brexit levels were 2.20 +.  If you are an Aussie seller mover at 1.81-1.82. Aussie buyers 1.84 if you have to move short term.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavor to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.