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John from Moneycorp

The Reserve Bank of Australia cuts interest rates

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The Australian dollar has weakened due to the Reserve Bank of Australia (RBA) cutting interest rates.

 

RBA have cut the cash rate to 4.5% from 4.75% and this is the first cut since April 2009 – RBA said they were concerned about the impact of global uncertainty on the Australian economy.

 

Also, not helping the Aussie dollar, new home sales (in Oz) fell 3.5% in September from August, their lowest level since December 2000

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Guest tommo66

Hi John

 

Do you see further rate cuts and would these in turn weaken the au dollar.

I am making the move soon and any advise would be appreciated. Also the referendom in Greece could alter the situation, whats your thoughts.

 

Many thanks

Andrew

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Generally, interest rate cuts for an economy has a negative effect on its currency.

One of the main reasons behind the rate cut is increasingly concern, from the Aussie perspective, about the impact of any further slowdown in the global economy. It is hoped the cut will help stimulate growth in the Aussie economy – for example, retail sales in Oz have seen a slowdown recently.

There is so much uncertainty around at the moment and this in turn is affecting most nations, making them take measures to try and protect their own economy. In relation to potential further cuts, one of the factors this will be dependent on is how the rest of the world performs.

If you have a money transfer to make in the near future, it is worth exploring the different options available when buying your currency – more information can be found here - http://moneytransfer.pomsinoz.com/Contractoptions.html

Thanks

John

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