Update for September

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Update for September
Topic Started: Sep 14 2006, 07:17 AM (140 Views)
HIFX plc	Sep 14 2006, 07:17 AM Post #1
Redback Posts: 9 Group: Members Member #3 Joined: June 30, 2006	Increase in Interest Rates, increase in wages! Over the past month, the Australian economy has seen some very strong data being released. The Reserve Bank of Australia (RBA) raised the interest rate by 25 basis points in August. This was the second increase in four months. A number of factors point to a stronger economy and the need for further monetary tightening in the months ahead. For example, wages grew more than expected in the second quarter of 2006, and Ian Macfarlane (Governor of RBA) said he is concerned that labour shortages will lead to higher wages and spur inflation. The index that measures hourly rates of pay (excluding bonuses) already increased 1.1% in the three months ended June 30 after gaining 0.9% in the first quarter. Also, a number of employers are using non-wage incentives to attract workers. This suggests that the labour market is very tight, with the unemployment rate at a 30-year record low of 4.9%. The risk is definitely skewed towards further tightening. In essence, the above information is illustrating that the Australian economy is strengthening. It is however important to remember that many factors can influence the currency markets, therefore it is impossible to forecast 100% accurately if the market is going to move up or down in the future. With the length of the migration process and with house prices in the UK still growing, you may find yourself with more equity from your house sale than you initially thought. This may in turn give you more Sterling to exchange when you start you new life in Australia. Protecting yourself from currency movements, even before you have sold your property is straightforward with HiFX, the migration currency specialists, with a “forward contract”. A forward contract involves putting down a 10% deposit to secure a rate of exchange until you need the currency when you can pay the balance of 90%. This way of buying currency is flexible and can accommodate changes in the time scale originally agreed – due to house sales falling through for example. If you have more funds then you anticipated because of an increase in your house price during the forward contract, you can transfer these on a “spot contract” or give your personal dealer a target to hit with a “Market Order”. Essentially, the spot contract means that you “buy now, pay now”, but because it is likely to be a smaller amount than the forward contract there is less risk associated with it. Being able to make the right decision based on your individual circumstances is something that the migration team at HiFX has a huge experience of. Your personal dealer will be able to tailor a strategy, free of charge, to help you manage your requirements in the most effective way possible. You can contact the Migration team on 01753 859 169 or email: migration@hifx.co.uk. Alternatively, visit the website: www.hifx.co.uk/migration



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