Aussie Dollar Update

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Aussie Dollar Update
Topic Started: Dec 8 2006, 02:36 PM (119 Views)
HIFX plc	Dec 8 2006, 02:36 PM Post #1
Redback Posts: 9 Group: Members Member #3 Joined: June 30, 2006	As widely expected the Reserve Bank of Australia (RBA) left interest rates on hold at 6.25% when they met on December 6th. This follows three 0.25% increases in interest rates by the RBA this year - the latest in November after increases in May and August - citing inflationary pressures as the key reason. The next meeting of the RBA isn’t until February 2007. Most economists believe the bank will now take a “wait-and-see” approach to gauge what impact the previous rate rises have had on curbing inflationary pressures. The RBA target range for inflation is between 2%-3%, but in September inflation was came in at 3.9%, so a further rate rise may not have been a surprise. Despite the RBA raising interest rates, the Australian dollar has slowly been declining against Sterling, going from GBPvAUD 2.33 to 2.51. The 2006 high of GBPvAUD 2.5177 was on 2nd October and was actually the highest level since December 2004. Generally, when a central bank raises interest rates it gives the currency a boost, because the higher yield makes the currency more attractive for investors. However with GBPvAUD this hasn’t been the case, which is just one example of how the currency markets don’t react as expected. As a migrant to Australia, it is paramount to ensure you are aware of market movements and any significant trends developing because the movement of your funds from Sterling to Australian dollars will have a massive impact on your future wealth. At HIFX, the migration currency specialists, each client has their own personal dealer whose role is to make you aware of the risks inherent in the currency markets. The move from £vAU$ 2.33 to £vAU$ 2.51 represents over 7% and because migration timeframes can be up to 12 months, it is imperative to monitor the currency markets for as long as possible. The most dangerous thing is to do nothing - by at least covering a percentage of your requirement you can spread your risk and give yourself piece of mind. Registering as a client of HIFX costs nothing and carries no obligation to trade. By registering you will have access to our experienced dealers who can work with you to devise a strategy to transfer your funds in the most cost effective, stress free way. To contact a member of the Migration Team at HIFX for a free currency consultation please call 01753 859159, email enquiries to migration@hifx.co.uk or visit the website at www.hifx.co.uk/migration.



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