The Reserve Bank of Australia kept interest rates on hold for the second month in a row this morning but there are fears that the RBA may cut rates further this year. The official interest rate is currently at 3% and part of the reason for keeping them on hold was due to retail sales remaining strong this year. Typically interest rates are cut to encourage growth and spending but with Australians spending freely at the moment it is unlikely we;’ll see a rate cut next month either causing further AUD strength against USD, GBP & Euro.
One of the ongoing issues that faces the Australian economy is the imbalance between the rich mining industry and the rest of the country. With Chinese growth remaining strong this has kept the Aussie Dollar particular strong against Sterling with further strength expected. Indeed, one of the objectives for the RBA is to rebalance Australia’s growth between the mining economy and the rest of the country.
There are some predictions that the RBA may push rates back to 4% later this year if the economy stabilises in the meantime without adjusting the official cash rate. With GBPAUD rates hitting 1.4750 this afternoon it is difficult to see the Pound recover against the AUD in the short term. The current quarter for the UK will decide whether or not Britain will be ion a triple dip recession and if that comes true we could see further Sterling losses so if you’re considering an Australian Dollar currency transfer it may be worth considering doing so in the next few days.
Governor of the Bank of England talks tomorrow morning and typically over the last year when he talks it often has a negative impact on the Pound so if you have a currency transfer to make get in touch for a free quote Tom Holian [email protected] and find out how as a specialist currency broker we may be able to help save you money