Two leading firms ANZ and TD Securities are the latest firms to suggest that they expect an interest rate cut from the Reserve Bank of Australia (RBA) next month.
|Currency Pair||% Change (Month)||Difference on £200,000|
Both confirmed in a report that their expectations are for a 25 basis point cut in May followed by a second cut potentially to happen in August.
It is believed that the RBA would likely not be in a hurry to carry out consecutive rate cuts (which some analysts believe could happen) due to the elections being carried out in May and to wait and see how accommodating the new Government will be with fiscal policy.
The percentage chance of a rate cut in May is now sat at over 70%. In general, when an interest rate is cut it tends to weaken a currency as it makes it less attractive to investors.
Current levels of 1.5% (which is a record low) could drop a few times throughout 2019 and this would likely lead to Australian dollar weakness as the year progresses.
With Anzac day today over in Australia and very little in terms of economic data due out over the course of next week most eyes will be on any further hints or any chances in the possibility of interest rate movement.
The next interest rate decision is due on May 7th.
Comments from members of the RBA could lead to sharp rate movements so be warned that at any time the Australian dollar may move overnight so it is key that if you have a currency exchange to carry out in the coming weeks involving the Australian dollar that you speak to a member of the team here to find out the various options we have available to you to protect your position.
If you have Australian dollars to buy or sell and would like us to monitor the markets for you so we can alert you in the event of a change to the rate, feel free to contact us today using the form below, and we will run you through the quick and simple process of having an account set up which will also give you access to rate alerts and many other handy market tools.
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