The RBA minutes came out last night and they stated that they are concerned about wage growth after years of easy monetary policy settings allowing people to borrow money cheaply.
Australian households are currently experiencing a huge amount of debt and they are concerned especially about home owners with interest-only mortgages.
The central bank assistant governor Michel Bullock said that the risks to the current levels of debt are ‘not particularly acute’.
However, clearly there is a big concern as if interest rates are allowed to rise and wage growth doesn’t increase this could cause a big problem for homeowners with interest only mortgages. The RBA are currently keeping close tabs on the economy and as mortgage debt is high and property prices appear to be slowing down then I think the RBA will keep interest rates on hold for quite some time to come.
This could, in the longer term, cause the Australian dollar to weaken as other economies including both the US and the UK are preparing to increase interest rates during the course of this year. The US have penciled in a rate hike for March with almost a 100% certainty of this happening whilst the UK may hike rates in May with a 75% of this happening.
This week the UK has a number of important data releases due out including GDP figures for the final quarter of 2017 tomorrow morning. Expectations are for growth of 1.5% year on year so anything different is likely to cause a lot of movement for GBPAUD exchange rates so make sure you keep a close eye out on what happens over the next few days.
If you would like to free quote when buying or selling Australian Dollars and would like to save money on exchange rates compared to using your own bank then contact me directly. Having worked in the foreign exchange industry for one of the UK’s leading currency brokers since 2003 I am confident of being able to save you money and help you with the timing of your transfer.
Feel free to email me directly with a brief description of your requirement and I look forward to hearing from you.
Tom Holian [email protected]