The Australian dollar is under pressure late in the Asian session today after the release of the minutes meeting from the Reserve Bank of Australia where they raised a number of concerns.
At 3.03pm (AEDT) the Aussie dollar was trading at US74.08c down from US74.14c in yesterday’s trading.
In their latest minutes meeting, the RBA noted that, they were still concerned about the rising property prices in Australia and the level of household debt that is also creeping up.
On the other hand, the central bank noted that unemployment rate was climbing and now currently sits at its highest rate in over a year, which raises the question, will interest rates increase or decrease in the nearest future?
If the RBA goes ahead and cuts rates it may help the jobless rate as companies borrow to expand business but it may further inflame the already overheated housing market which is at record levels and is already seen by many as unsustainable..
A hike in rates will have the opposite effect so they are faced with a big dilemma on the question of monetary policy.
It seems at this stage the RBA will just sit on the sidelines for much longer than expected and leave rates unchanged which will add further pressure to the Australian dollar against the greenback as the US gears up to raise rates further, which will narrow the interest rate gap between the two countries.,
"The market has the second of three Fed interest rate hikes penciled in for June and for the frequency of Fed rate hikes in 2018 to decrease. If that were to increase, it would be another reason to sell AUD/USD." said David Forrester, a foreign-exchange strategist at Credit Agricole.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
IMPORTANT: Please be informed, that our services are available for Professional Clients only. Our website is currently under review for the implementation of the correspondent amendments.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.|