Australian Dollar exchange rates have weakened against a basket of major currencies this week so far and depending on just what we hear back from the RBA during their interest rate decision and monetary policy statement next week. Expectations are for no change to interest rates either at this particular decision or for the coming months but what will be key for the Australian Dollar will be the comments in the monetary policy statement afterwards, and the tone taken by the RBA.
Recent comments from the RBA have suggested that they are not happy with Australian economic data at present and that this will hold them back from looking to raise rates in the near future. This is slowly dropping Australia behind, investors are pulling their money out of the Australian Dollar to seek higher returns elsewhere, for example moving money into U.S Dollars where the interest rate is now higher and the currency is perceived as a safer option.
One of the key issues for the RBA at present is the fact that average earnings/wage growth is not picking up at the pace they would like it to. This causes an issue as if the general consumer’s earnings are not moving up in line with inflation, then essentially people are going to have less money in their pocket to spend which leads to the economy weakening slightly.
This issue has been quite common around the globe, however many other regions are now starting to find that their average earnings figures are rising which is giving them more room to raise interest rates which is why the Australian Dollar is starting to suffer as a result.
My personal view has been that we will have a weak year for the Australian Dollar this year, and I have been saying that for a number of months now. It does appear at present that these predictions are starting to come true.
If you have a currency exchange to carry out in the coming days, weeks or months ahead and you would like my assistance both with the timing of your transfer and getting the best rate when you come to book it out, then do feel free to get in touch with me (Daniel Wright) directly on [email protected] and I will be happy to speak with you personally about your own situation and how to approach it. We specialise in currency for international property purchases/sales or clients who are emigrating or moving home. I look forward to speaking with you.