Aussie Dollar Update for January

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Aussie Dollar Update for January
Topic Started: Jan 13 2007, 11:02 AM (118 Views)
HIFX plc	Jan 13 2007, 11:02 AM Post #1
Redback Posts: 9 Group: Members Member #3 Joined: June 30, 2006	The Australian Bureau of Statistics announced the latest Australian retail sales figures on 9th January which showed an increase of 0.2% for November. Retail sales grew to AU$18.4 billion in November from AU$18.3 billion in October, which was in line with market expectations and suggests that consumers have taken the three interest rates rises in 2006 in their stride. The reason the Reserve Bank of Australia (RBA) increased interest rates in 2006 was to manage increasing inflation pressures that were creeping into the economy and it seems that the hike to 6.25% in November has had some effect, slowing retail sales from 0.9% year on year in October to 0.2% year on year in November. December’s retail sales figures, which are normally robust due to Christmas spending and expected by some market commentators to be fairly strong considering the reduction from October, and January’s retail figures will closely monitored by the RBA to see what impact 2006’s interest rate rises had on the economy. Depending on the Consumer Price Index (CPI) data which is released in January as well, the RBA may feel another interest rate hike is required to get inflation nearer it’s targeted 2%-3% band. The economic performance and movements of interest rates has a direct impact on the Australian dollar. This is because higher interest rates offer investors a better yield, which therefore makes the currency more attractive to purchase. The currency markets are unstable and volatile by nature, so if you are planning to migrate to Australia it is paramount to start considering the impact of the currency markets on your future wealth as soon as possible. Even without all your funds available, you can still secure a rate of exchange 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. On the other hand, you may prefer to divide your funds up in to “tranches”, securing some at the prevailing rate and then buying the rest using a “market order” if they believe that the exchange rate will go higher still. This is a great way to spread the risk. 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 dedicated dealer will be able to implement a tailored strategy, free of charge, to help you manage your requirements in the most effective way possible. You can contact the Migration team on Tel: 01753 859169, email: migration@hifx.co.uk or visit www.hifx.co.uk/migration



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