The Reserve Bank of Australia’s minutes will be published on Tuesday and will confirm the recent decision by the RBA to keep rates on hold.
The US raised interest rates in December and up until recently the expectation was for another 3 rate rises which helped to strengthen the Australian Dollar.
However, in the last few weeks it is becoming evident that there is a big slowdown coming.
Chinese growth has really started to slowdown and measuring 6.5% recently and with oil prices their lowest level in years this to me will have a negative impact on the Australian economy in time to come.
Nickel prices and iron ore prices have also fallen and with Australia so reliant on Chinese demand for its raw material I think it is a matter of time before the RBA looks to cut rates in order to kickstart the economy.
Therefore, although I don’t think we’ll see a rate cut just yet I think we could see some suggestions in the minutes that the RBA may act in the future if things continue so I expect the Australian Dollar to weaken during the week.
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