Reserve Bank of Australia cuts Australian Mortgage Rates 1%

THE Reserve Bank of Australia has slashed interest rates by 100 basis points to 4.25 per cent.

Interest rates are now at a six and a half year low, and more cuts are on the way, economists say. CBA chief economist Michael Blythe said the RBA was likely to cut by a further 50 basis points in February. "It's a brave call to say there aren't any more rate cuts out there but you need more negative data to get large, rapid-fire rate cuts."

Last month the central bank cut interest rates by 75 basis points to 5.25 per cent. This followed on from a huge 100 basis point cut in October, and a 25 basis point reduction in September.

Most economists had tipped a 75 basis point cut today.

Minutes after the decision was announced, a spokesperson for Commonwealth Bank told news.com.au the bank would pass on the full rate cut, effective December 12. National Australian Bank followed suit, announcing it would pass on the full rate cut effective December 12, while Westpac said it would cut rates by 80 basis points. ANZ cut rates by 0.83 of a percentage point, effective December 12.

The central bank will be hoping today's rate cut encourages Australians to pull out their wallets, after data released this morning showed spending remained stagnant, despite recent figures showing that prices have started to fall.

RBA governor Glenn Stevens said although government and central bank stimulus packages had begun to take effect, global financial market sentiment remained "fragile".

"With confidence affected by the financial turbulence and a decline in the terms of trade now under way, more cautious behaviour by both households and businesses is likely to see private demand remain subdued in the near term," Mr Stevens said.

"With that outlook, and with capacity pressures now easing, it is likely that inflation in Australia will soon start to fall."

Macquarie Group interest rate strategist Rory Robertson said the RBA had, with its latest cut, reversed some six years of monetary policy tightening in just four board meetings.

Economists believe rates still have a way to fall, with some looking for a cash rate of 3.25 per cent next year. It is only the second 100 basis point rate cut since May 1992 - following a 100 basis point cut in October this year. The total 300 basis points worth of cuts since September is also the deepest set of rate cuts since early 1990, when the RBA eased monetary policy ahead of a recession.

Taking into account today's cuts, Australians will head into the Christmas season around $700 a month better off, according to experts.

Full story visit www.news.com.au

Pounds to Australian Dollars is currently 2.3255

Bye For Now

Barbara Rockefeller
Foreign Exchange Trading

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Australian Dollar falls than goes up and than goes down than it goes up

Hi All

Australian Dollar falls, than goes up and then goes down, then it goes up and i am now getting very confused!!!

Today the pounds to Australian dollar rate opened at 2.3800 than went down to 2.3500 before going back up to 2.3900 before ending at 2.3300. This is getting very confusing and messy and show the importance of using limit orders to achieve the best exchange rates. today were buying Australian dollars at 2.3850 for a client which saved the client £3,459.12 or almost 2% just on the exchange rate alone.

So if you are migrating to Australia or just an expat looking for the best Australian dollar rate give us a call + 207 183 2790

Bye For Now

Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial

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Australian Dollar Exchange Rate Falls

Hi All,

Today had to be one of the worst days yet for the Australian Dollar after crashing by more than 4% in little over 4 hours. The pounds to Australian dollar exchange rate was last at 2.4300 after opening at 2.3300 this morning. The reason for the move is unclear but it seams like foreign exchange traders were looking to test the Reserve Bank of Australia's resolve of protecting the 0.6000 against the US Dollar.

Do we see this move strengthening the GBPAUD back to the 2.5000 level - we doubt it as Sterling has its own problems but any thing is possible against the Euro exchange rate which went from 1.95 to 2.055. But all bets are off if global stock markets continue to fall with the Detroit Bailout failing to get government approval.

On a positive note Reserve Bank governor Glenn Stevens last night stated that it was unlikely for property prices to crash do to under supply of Australian Property. On the downside getting an Australian Mortgages may be a little harder as the Australian Banks tightening the lending criteria as they have here in the UK.

exchange rate to Buy Australian Dollars currently 2.4100

Buy for Now

Damian George

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The Reserve Bank of Australia cut Australian Mortgage Interest rates by 75 bp to 5.25%

Pounds to Australian Dollar Outlook: The Reserve Bank of Australia cut Australian Interest rates by 75 bp to 5.25%, the biggest of the G7 bunch and more than 50 bp forecast as well as the third cut since September. The total drop in australian interest rates is now 200 bp. Despite a visible drop in demand from China and other emerging countries, Australia will probably have only a shallow recession this year and next, so the cuts are precautionary as well as a response to dipping domestic data like retail sales.

As a general rule, rate cuts are bad for a currency. This time the Australian Dollar rose from an overnight low at 65.97¢ to 68.29¢. The question is whether it will test the recent high at 68.93 from Oct 30. We don’t have a good explanation except that traders like decisive action, presumably think lower rates will work to keep the economy humming along, and the big move in a short while may suffice, leaving the Australian Dollar as the highest yielder in a world that generally seeks carry trade yield.

Market News offers an interesting contribution. Deputy RBA Gov Battellino raised questions about further rate cuts, saying "the cycle in the Australian housing market, rather than following the US market, is in fact at a more advanced stage; it is probably leading the US market by three years or so… The Australian housing market was at its hottest in 2003, whereas the US market peaked in 2006." Battellino also mentioned a “persistent inflation overhang” that makes it harder for the RBA to manage the economy.

We say this is interesting but not useful - regardless of the condition of the housing market, Australia cannot escape global consequences, including demand destruction for commodities.

Argh well at least Australian Mortgages are falling!

Pounds to Australian Dollars currently 2.3073

Buy for Now

Barbara Rockefeller
Forex Trading Reports

Buying Australian Dollars? Buy AUD at the best exchange rates -

Contact IMS Foreign Exchange +44 207 183 2790

iPod index reflects dive of Australian dollar

AUSTRALIA is the cheapest place in the world to buy an Apple iPod, according to a study to be released today, highlighting the dramatic fall in the Australian dollar in the past several months, The Australian reports.

CommSec will today release details of its "iPod index", which measures the price of an 8GB iPod nano in 62 countries to compare currencies.

CommSec chief economist Craig James said Australia had jumped to the cheapest spot after being placed 14th cheapest in July. An 8GB iPod costs $US131.95.

In July, a 4GB iPod (then considered the entry-level product) cost $US181.50.

"It's quite remarkable, we are the cheapest by a long way," Mr James said.

"Our currency has fallen dramatically."

It would be about 25 per cent cheaper for a British tourist to buy their iPod in Australia, rather than at home, Mr James said.

But while having an Australian dollar at US65c-67c was good news for manufacturers and other exporters as well as the tourism industry, Mr James said the iPod index shows the Australian dollar may have fallen too far too quickly.

Read more on this story at The Australian.

Pounds to Australian Dollars currently 2.3800

Reserve Bank of Australia intervened today and were looking to Buy Australian Dollars

Bloomberg reports that the Reserve Bank of Australia intervened today and were looking to Buy Australian Dollars, following a similar intervention on Friday. The only comment we have from the RBA is that the bank “provided more liquidity to the foreign exchange market.'' We don’t even know the name of the spokesman, let alone the amount. The NKS says “Foreign Exchange Traders said the bank's entry level was US$0.6125. Yet, as of 0550 GMT, the pair is even lower at US$0.6088.” The RBA confirmed the Friday intervention on Sunday, perhaps hoping to scare of Foreign Exchange traders when the market opened on Monday. It didn’t work.

Pounds to Australian Dollars currently 2.5100

Buy For Now

Barbara Rockefeller
Forex Trading Reports

Buying Australian Dollars - Get the Best Exchange Rates visit IMS Foreign Exchange

This is probably going to go down in Foreign Exchange history as one of the dumbest trades ever

Australian Dollar Outlook

We were wondering about the bizarre behavior of the Australian Dollar exchange rate on some days in recent weeks.

Now we may have an explanation.

According to the WSJ, Citic Pacific, the bluest of the blue-chip Chinese companies in Hong Kong (called, naturally, a red chip), could lose HK$15.5 billion (US $2 billion), and possibly more, because of leveraged positions on the Australian dollar. Citic has a big investment in an Australian mining company.

The WSJ says “the mining investment requires the company to buy equipment and supplies in Australian dollars. It isn't unusual for companies to hedge their foreign currency exposure. But Citic Pacific did something more: It turned to structured products dubbed "accumulators" that obligated it to buy a specified amount of Australian dollars"

In this case, about nine billion Australian dollars (US$6.1 billion at current exchange rates), at a fixed price.

“The Australian dollar's sharp downturn in recent months, a side effect of the global credit crunch, has left Citic badly exposed. Already, the bets have cost the company HK$807.7 million in realized losses and would cost it HK$14.5 billion more if they were marked to market at current values. Because Citic Pacific retains open positions, the losses could deepen if the Australian dollar continues to slide against the U.S. dollar.”

Bloomberg says CITIC stock fell 66% since the disclosure on Oct 20. It has “four times more money riding on the Australian dollar than it earned last year… [with a commitment] to buy as much as A$9.44 billion … at an average price of 87 U.S. cents. The currency traded at 66.72 cents as of 7:54 p.m. in Sydney” today. This is probably going to go down in Foreign Exchange history as one of the dumbest trades ever, along with VW and Bank Negara from the 1980’s.

Pounds to Australian Dollar exchange rate is currently 2.4473 and i you need to Buy Australian Dollars a good level at present is 2.4800 if you can get it

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Barbara Rockefeller
Forex Trading Reports - Click here for a free trial

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Australian Dollar starts slow and improves aganist the Pound

Hi All,

The Australian Dollar is staying very volatile with the AUD exchange rate but showed a lot of fight late today climbing back over the 0.7000 against the US Dollar and the pounds to Australian Dollar exchange rate heading back to 2.4300 which was last weeks low.

The range on the pounds to Australian dollars range is what is alarming me the most as we started the day at 2.5100 and almost 3% lower. These ranges are normally what emerging currencies trade per day, not the humble Aussie dollar. Seams to me that the idea that Australia is a commodity currency and as the world slips into a recession the Australian economy is going to suffer is the main story - but wait the Australian Government hasn't yet to bail out a bank never mind 3-4 banks, our housing market is starting to pick up, you can still get a mortgage.

If I was a gambling man and it is fair to say i am by the nature of my job, the Australian Dollar may weaken yes! but against the US dollar, Swiss Franc, Euro and Japanese Yen, not against the Pound. The UK seams to be rewarded for the prompt action of the British Government rather than a sound economy!

The UK economy is one built on sticks - the banking sector delivered record bonus after record bonus that helped fuel London property prices and helped the economy boom. But what is going to happen now those bonuses are gone and the Governments non-dom tax hits home? Bankers and those in Hedge Funds are leaving the capital and those staying are going to rein things in. Money is leaking out of the loop fast and it will filter down the chain even faster as the banker earning £300k lets his nanny, cleaner and Aston Martin go as their income comes back under £60k as banks fail to pay bonuses this year. And this is only one industry the follow on effects will be huge!!!

Take care when you Buy Australian Dollars not to be to greedy the - remember that the exchange rate only 2 weeks ago was almost 2 to 1 and 2.5 to 1 is the bargain of the year as the Australian economy proves jow robust it actually is.

Good Luck and buy for now

Damian George
IMS Foreign Exchange

Buying Australian Dollars call for the best exchange rates + 44 207 183 2790

Australian Mortgage Interest rates heading lower - Australian Dollar Outlook bleak

Hi All,

Looks like the Australian Dollar exchange rate is set for another tumble as experts suggest that the Reserve Bank of Australia needs to cut rates further to fend off the "r" word. Macquarie Group interest rate strategist Rory Robertson was quoted in news.com.au that interest rates will be as low as 4.25% by next year.

Whilst this is good for picking up Australian property prices and Australian Buliding Industry which has been extremley slow, but this is not ultimately what the RBA seams concerned with. what seams to be the bigger worry is the high level of consumer debt and slowing growth in Australia which is now at alarming levels. (Even inflation is on the back burner for the time being.)

"As the financial conditions continue to deteriorate, the Reserve Bank is becoming increasingly worried about the outlook for growth," Mr Robertson said. "So the Reserve Bank is cutting aggressively to limit the risk of recession in Australia."

But enough of this doom and Gloom what this means for many of us in the UK is that if you are migrating to Australia you are now looking at a much better rate to buy Australian dollars and if you are an Australian expat you have now have a chance to buy and home and send money home at a much better AUD exchange rate

Pounds to Australian dollars currently 2.5800

Regards

Damian George

Need to buy Australian Dollars call IMS Foreign Exchange for a free quote +44 207 183 2790

Australian Dollar fell out of favour today after yesterday’s brief rally

Hi All,

The Australian Dollar fell out of favour today after yesterday’s brief rally. It appears the world got ahead of itself and realised that the sky is still falling and there is now a rush to “safe” money mainly US Dollars, Euros, Pounds and Japanese Yen.

Being the loyal Australian I am, I am finding this very difficult to understand why the market keeps selling Australian Dollars at every point but sometimes things done make sense even though you want them to. If you are migrating to Australia this really doesn’t matter too much.

Look for the Pound to Australian Dollar exchange rate to say in the 2.48-2.58 range until something else happens.

Good news for those wanting to sell Australian Property – the new bailout package and first home buyers grant increases are working and 1st home buyers are re-entering the market and will hopefully push prices up, stimulate investment in Australia and boost the Australian building industry. (Good to see also 1st home buyers can get a Australian mortgage - unlike the UK.)

Pounds to Australian dollars exchange rate currently 2.5500

Regards

Damian

Need to Buy Australian Dollars? Best Australian Rates visit

IMS Foreign Exchange or call +44 207 183 2790 for a free quote

Australian Dollar Exchange Rate fights back against the Pound but Outlook suggests further Falls

Hi All,

The Pound to Australian Dollar exchange rate yesterday saw one of the most surprising rally's I have ever seen as the Dollar exchange rate went from 2.2700 to 2.7200 almost a 20% jump. The question everyone is asking is;

Why did the Australian Dollar fall by so much?

Simple answer the global economy is in melt down and foreign exchange traders around the world are having to take off complex carry trades which are bets on interest rates and now heading to the safe haven of US Dollars, Swiss Francs and Japanese Yen.

(The Australian Dollar and the New Zealand Dollar for the matter has been used as a high yielding currency and traders have been borrowing from Japan by buying Japanese Yen which current interest rate is 0.5% and investing in the Australian and NZ market at 7%+. )

Before you rush to buy Australian dollars there is further risk these trades will drag the Australian Dollar to US Dollar back to the 2001 levels 0.4775 this will correlate to a Pound to Australian Dollar Buy Rate of around 2.900/3.000 a level that most people didn't expect to see this year or next for that matter.

Traders will watch technical levels on the Australian dollar today, said Westpac's Rennie. The currency closed below 67.15 U.S. cents yesterday, a 61.8 percent retracement from its April 2001 low to a July 2008 high, according to a series of numbers known as the Fibonacci sequence. The close below that level could "open up a deeper sell- off and a long-term target to the 2001 lows at 47.75,'' wrote London-based Kevin Edgeley, a technical analyst at Goldman Sachs Group Inc. in a research note dated Oct. 8. source Bloomberg

So if you are migrating to Australia or just an expat sending money to Australia enjoy the bonus of a global meltdown/credit crisis - you are one of the very people that we benefit from the current market conditions.

Buy for now

Need to buy Australian Dollars at the best rate

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Pounds to Australian Dollars now 2.5500 - why is the AUD outlook so bad?

Australian Central Bank last night expanded the liquidity assistance it provides commercial banks in its daily money market operations. The Reserve Bank of Australia (RBA) said it would ease restrictions on the types of residential mortgage back securities (RMBS) it will accept as collateral for loans. It will also offer 6- and 12-month repurchase agreements each day in its operations, essentially lending for longer periods.

The Australian Dollar again came under selling pressure across the board and is down 3% against most currency crosses today. Seams like we are shooting the messenger as the Australian Central bank seams to be acting responsibly compared to the ECB and the Bank of England.

Pounds to Australian Dollars exchange rate currently 2.5600

Commonwealth Bank of Australia buys BankWest

Commonwealth Bank of Australia has agreed to buy British bank HBOS's Australian unit BankWest for A$2.1 bln, to boost its market share in fast-growing Western Australia. CBA said it would raise A$2 billion of Tier 1 capital in an institutional placement of securities to help fund the BankWest deal.

Well good on the CBA buying what i always thought was one of Australia's best banks - seams the biggest loser out of the credit crunch is the customer as choice and competition is disappearing out of the market. All we need now is a Crude Oil crisis and Shell and BP can merge funded by the tax payer and they can return billion pound profits.

This is just one big mess

But on a positive note if you are migrating to Australia the pounds to Australian Dollar exchange rate has rallied yet again today and you can Buy Australian Dollars at 2.5500

Buy for now

IMS Foreign Exchange

Pounds to Australian Dollar now 2.4800

Hi All,

To everyone's surprise the Pounds to Australian Dollars exchange rate has rallied to the highest point this year. That GBPAUD Exchange rate is currently 2.4880 from 2.2800 a change of 9% change on the day, almost unheard of in the world of foreign exchange. I am at a loss to explain the massive change in the AUD exchange rate but the general sentiment is that it is outright panic and foreign exchange traders are running to the safe havens on the Swiss Franc and the Japanese Yen. ( Is the Australian Banking System really that bad shape that traders are scared about borrowing from Japan to invest in Australian government back bonds at 7% or 6.5% after the interest rate cut - it appears so)

Although the Reserve Bank of Australia is expected to cut Australian interest rates by 0.50% this response is ridiculous and I expect the the Australian Dollar to come back to the 2.3000 level shortly which is more realistic as the Bank of England. What has made matters worse is that there is Public Holiday in Oz that is leading to extremely thin trading conditions and exacerbated the move.

But for those of you in the UK thinking about emigrating to Australia or paying off an Australian Mortgage it is music to your ears as being in the UK makes sense again.

Dont be foolish - is you are buying Australian Dollars you have been given a gift horse here - Buy Australian Dollars while you can at these levels - when normality returns so will the Australian dollar strength.

Buy for now

IMS Foreign Exchange - Click here for Australian Dollar Trading Reports

Buy Australian Dollars at best rates - call 0207 183 2790 for a free quote

Australian Interest Rates to Fall, But not Mortgage Rates

Hi All,

Seams like the Reserve Bank of Australia is set to cut interest rates on the 7th October but word is out that the big four Australian Banks (Commonwealth Bank, NAB, Westpac and the ANZ) will not be passing on anyt of the interest cuts due to the current credit crisis and increased funding costs.

We have written about this in the past about the greed of banks but nothing has been done to date and the current Australian Government seams to have riased the white flag on this issue with Wayne Swan the current Australian Treasurer conceeding that;

"What we have seen in recent weeks is a very big spike in borrowing costs internationally and that will certainly have an impact on domestic institutions. I am not going to speculate about what the Reserve Bank will do next week, but we do know when borrowing costs go down rates should follow. Of course, the reverse also happens - when borrowing costs are pushed up and, particularly pushed up sharply, that has consequences."

And while Opposition Leader Malcolm Turnbull disagreed saying banks should pass on the full amount i believe this is more of a voter pleasing stance rather than political view point as he has nothing to lose in this argument.

So there you are, good news - those needing a Australian Mortgage the RBA is going to cut interest rates! Bad News is - Greedy Australian banks are not going to be cutting Australian Mortgage Interest Rates! - Super

Pounds to Australian Dollars currently 2.2370

Buy for Now

IMS Foreign Exchange - need to buy Australian Dollars call 0207 183 2790

RBA to Cut Australian Interest Rates by 0.5%

The Australian Dollar exchange rate is the worst performer of the major foreign exchange crosses, down from 85.9 last week to 7925 late yesterday on a series of negatives, not least of which is crashing commodity prices. In addition, global recession in Australia’s big Asian markets can’t be too far behind, suggesting a second wave of expected fear. The domestic data suggests the slowdown already has a grip, with Australian mortgage lending at the slowest pace since 1986 and building approvals down for a second month. RBA Gov Stevens already said the economic expansion is decelerating, and the consensus outlook is for a interest rate cut by a big 50 bp at the Oct 7 policy meeting.

According to Bloomberg, Australian government bonds rose and the yield on the 10-year note fell 27 bp to 5.397%, the lowest since March 2006.

Pounds to Australian Dollars exchange rate currently 2.2500

Buy for Now

Barbara Rockefeller - Forex Trading Reports

Buying Aussie Dollars contact IMS Foreign Exchange

Australian Banks make Record profit whilst the rest of us suffer

Hi All,

another interesting article today in the The Australian about Australian Banks. It seams that whilst they have been crying poor and lifting interest rates above the Reserve Bank of Australia official cash rate and inflecting mortgage hell on the rest of us they have increased profitability to 1 Australian Dollar per every 2 Australian dollars earned.

The four pilliars of the Australian Banking system Commonwealth Bank, National Australia Bank, ANZ and Westpac all lifted their mortgage rates by more than the Reserve Bank.

This just isn't fair - the banks are clearly just raising profit margins and blaming the credit crunch. Has anyone noticed an increase on the interest paid on savings accounts - i dont think so.

Bye for now

IMS Foreign Exchange

Emigrating to Australia and need to Buy Australian Dollars? Best Australian Dollar Exchange Rates visit www.imsfx.co.uk

Sydney Rent Prices to Soar as Australian Dollar tumbles

Hi All,

found an interesting article today in the Australian News about rent prices in Sydney that may interest those expats moving back to Australia or those of you migrating to Australia

Landlords warned on rent hikes

The story highlights the chronic shortage of Australian Property at the moment and whilst Sydney is experiencing falling house prices, rental yields are going through the roof due to lack of investors in the buy to let market, low affordability of Australian homes for first home buyers, and the credit crunch and higher interest rates taking hold of those coming off fixed term mortgages faced with the real possibility of repossession of the family home.

The Sydeny rental market was like this after the 2000 Sydney Olympics but that is when people could borrow money freely and what resulted was a property boom of epic portions,

Do we expect the same to happy in 2008 - i don't think so - finance is only available for the cash rich.

Read the story and please leave comments on the blog to get a bit of a chat going for us Australian Expats living in London

Buy for Now

IMS Foreign Exchange - Visit us to Buy Australian Dollars at the best exchange rate

Australian Dollar exchange rate falling against both the US dollar and Pound

Hi all

The Australian Dollar is coming under further selling Wall Street tumbles after the Lehman Brothers news yesterday. The Australian Dollar to US Dollar exchange rate was trading below 0.8000 at 0.7850 which is music to the ears of Australian Exporters but will only push up prices further and help fuel inflation which the Reserve Bank and Australian Government are very concerned with.

Australian Prime Minister Kevin Rudd tried to boost confidence yesterday saying that the govt is in talks with the RBA regarding the Wall St crisis. Adds that the global crisis has a "long way to run yet." But the words where not heard by foreign exchange traders who still continue to sell the dollar.

Personally i can see the Australian Dollar exchange rate falling against both the US dollar and Pound to the 0.7350 and 2.3500 level in a very quick time as may FX traders would be sitting on large profits or get out of old losing positions.

Be very cautious with the Australian dollar - it has been know to bite back as i have found out personally many times

Bye for Now

IMS Foreign Exchange

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Pounds to Australian Dollar Exchange Rate tumbles

Hi All

Last night the Australian Reserve Bank realease it minutes of its last meeting - in short they have stated that the central bank had to cut interest rates this month to avoid the danger of a sharper economic slowdown than necessary, though policy could still need to be restrictive for some time to bring inflation down from 17-year highs.

The news wasnt taken that we by foreign exchange traders and the Australian dollar was dealt a fast swift blow and the Pounds to Australian Dollar exchange rate is now trading 2.2750, great news if you are migrating to Australia or live in the UK with an Australian mortgage like me.

Dont get to excited though the comments where meant to suggest that there will be now need for future rate cuts, although I theing the Australian Interest rate outlook is interest rates back in the 6% band as the Australian Housing market is still suffering and is also one of the countries biggest employers and the australian government needs it firing to keep employment down and GDP up.

Bye for now

IMS Foreign Exchange -

Please contact us for the Best Australian Dollar exchange rate

Currency Traders Sell Australian Dollars

The Australian dollar has closed below 0.8000 against the US Dollar for the first time in more than a year as a surprise drop in the jobless rate failed to give the currency a sustained boost.
A bigger than expected New Zealand interest rate cut drained momentum from the Australian dollar as foreign Exchange traders dumped high-yielding currencies.

The Australian dollar was trading at $US0.7954/57, down from yesterday's close of $US0.8075/79, marking the third successive weaker finish. This was the unit's lowest closing level since August 17, 2007 when the Australian dollar finished at $US0.7741/47.

During the day, the local currency traded between a late morning low of $US0.7945 and an early afternoon high of $US0.8020. The Australian dollar finished below 86 Japanese yen for the first time since July 2006.

The domestic currency struggled after the Reserve Bank of New Zealand cut interest rates this morning by a bigger than expected 50 basis points, taking the cash rate to 7.5 per cent.

"The Aussie dollar did open up this morning under pressure, tracking the Kiwi dollar,'' Easy Forex currency dealer Anthony Botros said. "It's been a concept in the market that because they're neighbouring currencies they do tend to track each other.''

The Australian dollar rose above $US0.8000 in late morning trade from its daily low, after Australian Bureau of Statistics data showed the jobless rate in August falling by 0.2 percentage points to a five-month low of 4.1 per cent.

The seasonally adjusted data was better than market forecasts of a 4.4 per cent unemployment rate for last month, and helped the Australian dollar step above $US0.8000. Mr Botros said traders saw the noon rally as a chance to sell the Australian dollar.

"The (labour market) figures were relatively good but they don't show much of a correlation to recent commentary from the Reserve Bank regarding ... a slowing economy even though interest rate easing will be subdued,'' he said.

Reserve Bank of Australia governor Glenn Stevens told a parliamentary economics committee on Monday that he expected the jobless rate to rise above five per cent in the next 12 to 18 months as the economy slowed.

For the full story visit news.com.au

Neen to buy Dollars? for the Best Exchange Rate visit IMS Foreign Exchange

Reserve Bank of Australia cut rates today by 25 bp to 7%

The Reserve Bank of Australia cut rates today by 25 bp to 7%, as expected but a bit earlier than some had forecast. RBA Gov Stevens said overall economic slowdown should help inflation fall back to the desired 2-3% level from 4.5% today. The WSJ reports the move is the first cut since Dec 2001 and starts the unwinding of the twelve rate hikes that started in May 2002. Australia reports Q2 GDP tomorrow, probably 0.4% q/q and 2.9% y/y.

Pounds to Australian Dollar exchange rates 2.1300

bye for now

IMS Foreign Exchange

Australian Dollar falls again

The Australian Dollar lost almost one US cent today to close at its lowest point this year.

The Australian Dollar was trading at 85.61 US cents, down from yesterday's close of 86.53 US cents.

It is the second time this year the Australian dollar has closed the local trading day below 86 US cents, closing even lower than the previous 85.95 cents finish on January 22.

Commonwealth Bank currency strategist Joseph Capurso said a stronger US dollar was the major factor behind today's fall.

The Australian dollar has lost 13 per cent since hitting a 25-year high of 98.49 US cents on July 16 - levels not seen since the days of a fixed exchange rate.

Mr Capurso said the decline was one of the fastest in the currency's history, having slid in almost a straight line since.

"As soon as it hit that, it's spent most of the time falling," Mr Capurso said.

"It's been one hell of a fall for the Aussie dollar."

Mr Capurso said he expected it to be buoyed by new economic data over the next fortnight, and described the slide as temporary. "We think the market is going to be surprised about the resilience of the Australian economy, so we think that the Aussie will find some support," Mr Capurso said. Commonwealth Bank has forecast the dollar to reach 90 US cents by December.

Full story at news.com.au

Pounds to Australian Dollars exchange rate is currently 2.1500

Good news for those with Australian Mortgages

What can be only seen as good news for those with Australian Mortgages or the need to Buy Australian Dollars the Reserve Bank of Australia gave the strongest indication that interest rates will be cut in the coming months.

Today the Pounds to Australian Dollar exchange rate is trading at 2.14000 to Buy Australian Dollars

THE minutes of the Reserve Bank's August board meeting have all but confirmed there will be an interest rate cut next month.

But the minutes gave little encouragement to market speculation that the central bank could cut the official cash rate by 50 basis points, economists say.

The minutes of the meeting, at which the cash rate was left unchanged at at 12-year high of 7.25 per cent, said "a case could be made for an early reduction in the cash rate".

Board members were conscious that financial conditions were "clearly quite tight and effectively getting tighter as a result of ongoing pressure on lenders cost of funds in the market", the minutes said.

"Given there had been a significant change in borrowing behaviour, confidence was weaker, asset prices had declined and slower overall growth was in prospect, tighter financial conditions were not warranted," the minutes said.

"Indeed, less restrictive conditions could soon be called for, otherwise the risk of a deeper and more persistent slowing in the economy would increase."

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The Australian Dollar continues to struggle

The Pound to Australian Dollar exchange rate continued its march towards 2.2000 as gold prices fell below the $800 mark for the first time in years, the expectation that the RBA is going to cut interest rates soon and that Foreign Exchange Traders are dumping their carry trades (selling Australian dollars and buying back Japanese Yen) a very similar story to what is happening to the New Zealand Dollar.

This is good news if you are going to buy Australian dollars in the coming weeks as the 2.20/2.30 becomes an achievable exchange rate again and no longer seems like a pipe dream it did only 6 weeks ago. Foreign Exchange markets do deliver swift justice.

Although there is no good news for the Pound which looks like it is heading below 1.8000 and may even head towards 1.7000 to 1.6500 as the endless bad news fails to hault the selling.

If you do need to Buy Australian dollars and looking for the best exchange rate

contact us and we will help you achieve the best exchange rate possible

Bye for Now

IMS Foreign Exchange

Australian Dollar fights back against the Pound

The Pound to Australian Dollar exchange rate hit a high of 2.2000 last night almost a 10 percent improvement of the years low. But for Expats and those migrating to Australia the relief was short lived as the Pound continues to crumble due largely to Pound to US Dollar exchange rate playing catch up to the recent moves in other currencies against the US Dollar and worsening economic conditions plummeting as inflation hits 5 percent. Added to the Pound's woes was Barclay's announcement today that it has moved forward its time frame for the Bank of England cutting rates later this year as the UK economic conditions continue to weaken .

We tend to agree with Barclay's that if Bank of England stays focused on inflation - growth and consumer confidence will tumble and the recession will become a certainty.

In Australian local financial news the Commonwealth Bank of Australia announced its annual profit by 7 per cent and forecast the local economy to grow modestly amid continued headwinds from the global credit crunch.

Net profit for the year ended June 30 rose to $4.791 billion while the bank's preferred measure of profitability, cash earnings, rose 4.6 per cent to $4.733 billion.

Yet again banks not understanding why we complain about services, fees and interest rates on our Australian Mortgages. They seem to be oblivious to the consumer and the consumers needs.

A rant for another day.

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Australian Dollar has fallen for 11 straight days

The Australian Dollar has fallen for 11 straight days for the longest losing streak since 1975 and to a 6-month low, according to Bloomberg. It is losing ground not only because of commodity price declines, but also the outlook for further Australian Interest Rate Cuts.

Bloomberg says “The Reserve Bank of Australia said yesterday that a ‘significant moderation’ in domestic demand would give it room to lower borrowing costs…

Foreign Exchange Traders are certain the RBA will lower its 7.25pc base interest rates by at least a quarter-percentage point when it meets next on Sept. 2,” according to the Credit Suisse swap analysis. The RBA will cut by a total of 97 bp over the next 12 months, or effectively 1%. In July, the analysis called for cuts of half that.

This makes the Australian Dollar less desirable against its commodity-currency competitor, the Canadian dollar, where policy decisions are more closely tied to those in US and thus already at relatively low interest rates.

Bye for Now

Barbara Rockefeller

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Australian Dollars Fall

The Reserve Bank of Australia’s quarterly statement on monetary policy yesterday hinted that the RBS is finished hiking interest rates and in fact now looking towards maybe cuting the Australian Base Interest Rates in the coming months which will be a relief to those who have or want a Australian Mortgages.

The fall of the Australian Dollar has been fairly spectular as the Pounds to Australian Dollars exchange rate has gone from 2.0200 to 2.1757. If it goes through the 2.18/2.200 level we could see the Australian Dollar fall off a cliff and head back towards its natural comfort zone of 2.5000 which would make all the british expats including this one very happy.

Pounds to Australian Dollar exchange rates is currently trading 2.1708

Bye for Now

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Australian Interest rates kept on hold, cuts predicted

Interest rates kept on hold, cuts predicted

AS expected, the Reserve Bank has kept official interest rates steady today at a 12-year high of 7.25 per cent, in line with expectations. The decision was widely tipped, with all 19 economists surveyed by AAP expecting the RBA to leave the cash rate steady.

Reserve Bank governor Glenn Stevens indicated in a statement that while the board felt it was appropriate to keep rates steady this month, relief could be in sight.

"Weighing up the available domestic and international information, the board judged that the cash rate should remain unchanged this month. Nonetheless, with demand slowing, the board’s view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing," he said.

Interest rates 'won't go higher' ANZ chief economist Saul Eslake said the statement give a clear impression that interest rates have peaked. "That's an indication not only that there aren't going to be any more increases in interest rates but raises the question of when do they cut," Mr Eslake said. "The statement does not give any clues as to when that might be."

The central bank reaffirmed its forecast for inflation to fall back within its 2 to 3 per cent target band during 2010. Mr Eslake said moves this year by commercial banks to raise their borrowing rates independently of RBA decisions has been a "critical factor altering their thinking" about the economy.

"Additional rises in market interest rates and tougher credit standards have delivered some additional tightening of financial conditions without them having to lift a finger," Mr Eslake.

"That's clearly had some impact on the economy."

Rates cut by Christmas?

Lehman Brothers chief economist Stephen Roberts said Mr Stevens' statement about a "less restrictive" monetary policy stance had increased the possibility of an interest rate cut by the end of 2008.

"There could be one by Christmas - they're going to wait for more data," he said.

"They've got an easing bias but there's no timing on that ... they're not in a particular rush to change.

"They talk about uncertainty weighing on both inflation and growth."

Mr Roberts, who is forecasting rate cuts in the March quarter, said the RBA would not move on interest rates until at least after the October 22 release of September quarter consumer price index data.

"They did talk about inflation remaining high in the short term, but on balance economic growth remains subdued," he said.

But the banks aren’t necessarily listening. Commonwealth Bank chief executive Ralph Norris last month refused to guarantee that CBA would cut interest rates if official rates were cut.

Full story at news.com.au

The Australian Dollar has lost a lot of ground against the pound at the moment falling from 2.0500 to 2.1200

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Australian Interest Rates unchanged

The Reserve Bank of Australia as expected left Interest Rates unchanged at 7.25 percent last night breathing a sigh of relief from those with an Australian Mortgages. Australian Housing prices have taken a tumble over the last few months and with the commodity boom seaming to be coming to an end many hoped the RBA would actually cut interest rates and provide a soft landing and slow the economy rather than let it head to a recession.

A summary of the main points are as follows from its policy statement;

There has been substantial tightening in financial conditions.

Scope to move towards less restrictive policy.

Considerable uncertainty surrounds outlook.

Looking more likely that demand will remain subdued.

Inflation likely to decline over time.

Tightening in conditions, rising fuel costs, lower asset value restrain demand.

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Pounds to Australian Dollars currently 2.1294

Pounds to Euros currently 1.2625

Pounds to US Dollars currently 1.9583

Canadian Dollar was overvalued at $1.00

Foreign Exchange Traders are scrambling for reasons why the Canadian Dollars and Australian Dollars exchange rates are so weak. One idea is that carry-traders are feeling risk averse and reducing activity. Another idea, and one we like better, is that commodity prices are falling, whether we want to see it as bursting bubbles or not. Behind the drop in commodity prices is slowing demand from the US (affecting the CAD) and from China (affecting the AUD). Bloomberg notes that 54% of Canadian exports are commodities such as gold and oil, and the rest of the economy is dependent on the US, too. Canada’s growth will be only 1-1.5% this year, less than the US.

The Canadian Dollar was overvalued at $1.00 and still overvalued at 98 cents.

Australian biggest six-month fall in wealth since the 1982-83 recession.

Alarm over fall in wealth

TUMBLING share markets and sliding property prices have produced the biggest six-month fall in wealth since the 1982-83 recession. The fall in wealth comes as income growth has stagnated and is expected to cause consumer spending to remain weak into next year. However, Finance Minister Lindsay Tanner called on people tipping a recession to take a reality check, saying the economy was still in good shape, even though it was slowing. "It's crucial that we don't get spooked by one or two bad sets of figures," he said, ahead of the Reserve Bank board meeting tomorrow. He said the budget tax cuts andthe continuing resources boom would keep the economy "ticking along".

"Yes, the economy is slowing, yes, we need to take the steam out of inflation, but people talking recession are getting way ahead of the facts."

However, economists say there is a growing number of indicators showing the economy is in danger of contracting. Investment bank ABN-Amro estimates that average wealth fell by 5 per cent in the first half of this year. The bank's chief economist, Kieran Davies, said declines in wealth were unusual, with the decline in the early 1980s the only time since World War II when wealth dropped more rapidly than in the past six months:

"The rapid decline in wealth is another series that can be added to the already long list of indicators that are behaving as if the economy is on the edge of, or in, recession."

The value of household financial assets fell by 6.6 per cent in the March quarter as share prices plummeted and by a further 1.25 to 1.5 per cent in the June quarter.
Housing accounts for about two-thirds of household wealth and is also slipping in value. Preliminary estimates suggest that housing prices fell by about 2 per cent in the second quarter.
Mr Davies said the fall in wealth this year contrasts with the 11 per cent growth in the value of household assets last year.

Households traditionally spend a portion of increases in wealth, and cut back when it falls.
Mr Davies said there was a possibility spending could decline by 1 per cent. He said rising interest rates and inflation had also brought growth in disposable income to a halt, after rising at a rate of 8 per cent last year.

He said this year's tax cuts should lift income by about 1 per cent, but the underlying trend showed no growth.

Although financial markets expect the Reserve Bank to deliver its first cut to interest rates in September, most economists believe it will take longer for the bank to act.

A survey of private sector economists conducted by Reuters found that only 8 out of the 21 it asked expected rate cuts this year, with only a 30 per cent chance given to a cut by September.
All but one of the economists expect the Reserve Bank will have cut interest rates by this time next year.

The Reserve Bank may want to see some evidence that the slowdown is affecting the labour market before concluding that the threat to inflation from an over-stretched economy has eased.
Employment figures for July will be released on Thursday, with economists tipping a small increase in the unemployment rate to 4.3 per cent.

Full story at The Australian

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Pounds to Australian Dollars currently 2.1100

Australian Dollar fell

The FT reports that the Australian Dollar fell on reports in the Australian press that the Reserve Bank of Australia would seriously consider cutting interest rates after its policy meeting next week.

The Australian Dollar was also hit by a fall in the Chinese purchasing managers’ index, which dropped below the 50 level that suggests contraction for the first time on record. Analysts said this was evidence that rampant Chinese demand for Australian commodities might have peaked.

The Pound to Australian Dollars today took a battering and the best australian dollar exchange rate is currently 2.1176