RBA Likely to Hold Says HSBC

In a recent update, HSBC Global Research said the RBA is likely to keep the interest rate on hold as the depreciating Australian dollar loosens financial conditions.

HSBC chief economist, Australia and New Zealand Paul Bloxham said: “Currency depreciations may not work for every country, but the lower Australian dollar is already providing clear support for Australia’s growth.

“With the Australian dollar doing the work for them, we expect the RBA to be reluctant to cut rates further, despite the slowdown in China and the recent delay to the [US] Federal Reserve’s interest rate ‘lift off’.”

The Australian dollar has fallen six per cent in trade-weighted terms over the past three months and is now at a level the RBA is satisfied with. 

Via InvestorDaily

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza