RBA News and Predictions

[JulieW]

The Age has a good summary today

http://www.theage.com.au/business/r...look-brightens-20091106-i178.html?autostart=1

Reading between the lines, they're still nervous and question of a December rise is still up in the air.

 

[Aaron Sice]

so i don't understand.

dollar is up, making imported goods cheaper like oil (coughbullsh*tcough), which controls imported inflation.

construction is up.

spending is up.

inflation is on target - 2.25%.

why do we need to raise rates.....? why is Australia FIXATED on a minum 5% cash rate...?

 

[PeterC]

for a safety blanket - some feel we survived better than other economies because we had a lot of moving room on interest rates. 5% leaves a lot of room.

and the dollar is up a bit too high if you stop talking to consumers (importers) and start talking to exporters. rate rise will help stop further upward movement by AUD

 

[charttv]

The RBA's primary and almost only weapon is rates. The magazine was empty and needed reloading.

If they get it wrong they can always cut promptly, the whole world ain't gonna go to hell and a handbasket in a month because of one 25bps rise too many.

 

[Thrawn]

rate rise will help stop further upward movement by AUD

you'd think that the rate rise will encourage more AUD buying.. which drives it even further up

 

[Ausprop]

correct. for the interest rate differential the AUD is lookign cheap. If the gap widens we could see the AUD go for a real run.

The RBA is toning down its talk of rising IRs because they dont want the AUD situation to get out of hand. Once again I think it will happen anyway, just as house prices will rise anyway.