NAB indicated today that there would be 2 more 0.25% increases in FY08 and then interest rates would fall in 2009.
BOE has indicated that there would be no further interest rate cuts until 2010 with rates likely to rise to counter inflation.
In 12 months time we could have the opposite situation where UK rates are rising nad Oz rates are falling. Logically this should strengthen the GBP &/or weaken AUD.
In recent years the Oz currency has attracted investors due to it's high yield which could be reversed if it's anticipated that rates will fall.
What are people's views on where the GBP:AUD rate will be in 12 months time?
A - below $2.00
B- $2.00-$2.10 (current level)
C - $2.10-$2.30
D - $2.30-$2.50
E - higher than $2.50
__________________
Happiness is a path not a destination - Silk Road fortune cookie
Our economy is sure to get much worse before it gets better, therefore I think £ will get weaker, not helped by scaremongering in the media. Of course no-one's going to buy a damn house if you hear on the news every day that prices are expected to fall further, who can blame people for sitting tight and waiting for a bargain!
Would I be wimping out if i said "F" - not too sure?! If you're now down in OZ, you're best bet is to have a chat with our dealers down there, but here's what I think:
There seems to be quite a lot of conflicting data at the moment, which just confuses the situation even more. Most analysts are predicting a couple more rate hikes from the RBA (next announcement is June 3rd) before the end of the year, although much will depend on the increasingly widespread effects of the sub-prime issue and how long the Australian economy remains as buoyant as it has been.
With regards to the UK, inflation is certainly an issue and the main focus for the Bank of England. The minutes from the last meeting confirmed market expectations that rates could be left on hold for some time, although it is important to realise that the rising energy costs have been the main driver for these high inflation figures.
The psychological $2.00 to the £ mark is obviously the next key level, and most of the evidence at the moment suggests there is no reason why we shouldn't see this in the next couple of weeks. Where we go from there will be the interesting point. The New Zealand economy can be a good indicator of what is happening in Australia, and that has seen a bit of a slowdown in recent months so we will be keeping a close eye on that.
However, the UK economy would still have to pick up, and with seemingly endless bad news in the press, the end of the tunnel seems a long way away!!
This may all seem very depressing, but I think it is just a case of getting used to these new levels - you can't change the past. When the rates were at $2.50, everyone was happy to buy their dollars, yet back in 2001 the rates reached over $3.00, so why did people not wait? It was a different country and economic climate back then, much like it is now compared to 18 months ago.
Nobody can predict where the markets will go, and the decision about when best to send over your money will be different from person to person. We will obviously help try and make this decision as easy as possible, give you the facts behind the figures and also explain the process involved with foreign exchange transfers.
The rate of exchange is not going to be the reason you have chosen Australia, with the lure of fantastic job and lifestyle opportunities for yourselves and your children most probably being the decision for your move. However, you will all want as many dollars to start your new life with as possible, and so learning about your options and managing your exposure properly is a critical step in making this happen.
I hope this helps, and sorry to blab on!! Fingers crossed Mr Brown sorts this country out (I live in hope!).
NAB indicated today that there would be 2 more 0.25% increases in FY08 and then interest rates would fall in 2009.
BOE has indicated that there would be no further interest rate cuts until 2010 with rates likely to rise to counter inflation.
In 12 months time we could have the opposite situation where UK rates are rising nad Oz rates are falling. Logically this should strengthen the GBP &/or weaken AUD.
In recent years the Oz currency has attracted investors due to it's high yield which could be reversed if it's anticipated that rates will fall.
What are people's views on where the GBP:AUD rate will be in 12 months time?
A - below $2.00
B- $2.00-$2.10 (current level)
C - $2.10-$2.30
D - $2.30-$2.50
E - higher than $2.50
I don't know where you've heard that the BOE has said that %rates would need to go up to counter inflation? Just think about it for a minute. If the price of things were going up due to consumer demand and above average wage increases, then the BOE would need to up rates to even things up. At present, fuel, Gas & Electric and the majority of food prices are all on the way up. This is NOT consumer driven and therefore has the effect of leaving people with LESS disposable income to spend on their increasing Mortgage payments. Banks and Building Societies are increasing their % rates regularly even though the BOE base rate has gone down to 5%. ALL of these ingredients form the biggest part of the Inflation Rate Recipe which is not being affected by consumers. Therefore, the BOE is left in a very awkward situation of feeling it should up %rates to curb inflation but knowing that if it did it would cause a property crash and recession. It is for this reason,that I think that rates will remain around 5% for the forseeable future. If anything they may go down.
NAB indicated today that there would be 2 more 0.25% increases in FY08 and then interest rates would fall in 2009.
BOE has indicated that there would be no further interest rate cuts until 2010 with rates likely to rise to counter inflation.
In 12 months time we could have the opposite situation where UK rates are rising nad Oz rates are falling. Logically this should strengthen the GBP &/or weaken AUD.
In recent years the Oz currency has attracted investors due to it's high yield which could be reversed if it's anticipated that rates will fall.
What are people's views on where the GBP:AUD rate will be in 12 months time?
A - below $2.00
B- $2.00-$2.10 (current level)
C - $2.10-$2.30
D - $2.30-$2.50
E - higher than $2.50
I don't know where you've heard that the BOE has said that %rates would need to go up to counter inflation? Just think about it for a minute. If the price of things were going up due to consumer demand and above average wage increases, then the BOE would need to up rates to even things up. At present, fuel, Gas & Electric and the majority of food prices are all on the way up. This is NOT consumer driven and therefore has the effect of leaving people with LESS disposable income to spend on their increasing Mortgage payments. Banks and Building Societies are increasing their % rates regularly even though the BOE base rate has gone down to 5%. ALL of these ingredients form the biggest part of the Inflation Rate Recipe which is not being affected by consumers. Therefore, the BOE is left in a very awkward situation of feeling it should up %rates to curb inflation but knowing that if it did it would cause a property crash and recession. It is for this reason,that I think that rates will remain around 5% for the forseeable future. If anything they may go down.
