Just days after the RBA decided to cut interest rates, further talks have already begun for a second round of cuts.
Glenn Stevens, Governor of the Reserve bank of Australia, will be replaced on 18th September by Deputy Governor Phillip Lowe for a seven year term. This handover announcement comes just after the RBA were forced to cut interest rates to a record low from 2% to 1.75% this week in an attempt to boost the economy and inflation.
In the early hours of this morning, the RBA released their latest Monetary Policy Statement and announced that they are likely to cut Interest Rates further if growth does not improve. This came as a surprise to investors as the last rate cut was only announced on Tuesday, and the AUD crashed instantly against all of its major counterparts.
This has provided an excellent opportunity for anyone looking to purchase AUD, falling by 1.5% against the Pound alone. The news has made a $200,000 purchase just under £6000 cheaper than at the lowest point of yesterday, so anyone with a pending requirement may wish to take advantage of this spike while it lasts.
Prime Minister Malcolm Turnbull has announced that he will call the Federal election this weekend to elect the next members of the 45th Parliament of Australia, and as we have recently seen in the US and last year in the UK, any election of this scale is likely to cause uncertainty and volatility for exchange rates. I would strongly recommend keeping in close contact with your Trader here to keep up to date with the progress of the election and what this could mean for any pending currency exchange requirements.
Next week appears to be very quiet for data releases, with only Home Loans and Investment lending for homes data being announced in the early hours of Wednesday morning, and so I expect the main catalyst for any fluctuations in exchange rates next week will likely be due to developments from the Federal Elections.
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