There is a slight under current at the moment that the Australian Government may be starting to push back on Chinese investment after a $9bn offer for energy Infrastructure Company APA Group was rejected earlier this week.

Over the past few years there has been a major influx of Asian money coming into the country, which has helped to boost economic growth. However, this has also created a housing price boom as foreign investors continue to buy properties pricing out locals trying to join the ladder.

Last month we started to see a fall in house prices which could have a major knock on effect, with some analysts speculating that we may soon see an interest rate cut in Australia, depending on how on fast property prices start to fall.

Currency Pair% Change in 1 monthDifference on £200,000
GBPAUD4.70%$16760 AUD
Reserve Bank of Australia may have to raise interest rates

RBA Statement

The Reserve Bank of Australia Monetary Policy Statement in the early hours of this morning pointed towards a waiting game to see if consumer spending follows the route of house prices. They seem reluctant to act until there is a few more months of data to justify any actions.

However they did point towards stronger growth forecasts for 2020 along with an improvement in unemployment, so the RBA may be closer to a potential interest rate hike than some believe. Alternatively there is a lot of positive things that need to happen in Australia for the central bank to potentially follow suit with the rest of the world on interest rates.

Wage growth and consumer spending are likely to be the key indicators for the RBA, and they’re optimistic for both, however an interest rate hike is, at the moment something of a pipe dream. 

Australian economic data may once again be more of a focal point than global influencers so make sure you’re in contact with your trader if you’re looking for a movement either way. 

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