The first in a string of RBA rate hikes is coming sooner than you thought

The first in a string of RBA rate hikes is coming sooner than you thought

Goldman Sachs thinks it will be months — not years — until the RBA hikes rates. Andrew Boak and Bill Zhu from the Goldman Sachs Australian economics team think the RBA will lift the cash rate for the first time since 2011 by Melbourne Cup day this year.

Financial imbalances are building and RBA governor Philip Lowe places a great deal more weight on financial stability risks fearing macroprudential policies to cool rampant investor activity in Australia’s housing market may not work.

Read the full article at Business Insider Australia.

Boak and Zhu’s view: We have pulled-forward our forecast start of the RBA’s tightening cycle to November 2017 and now expect two rate hikes in 2018, and three subsequent increases in 2019 to take the cash rate to 3.0% by 2020.

The Australian Financial Review notes: In his post-meeting statement, Dr Lowe noted that US interest rates were "expected to increase further" and that other major central banks were no longer delivering extra monetary policy easing.

Policymakers are paying particularly close attention to developments in the US, where the Federal Reserve is widely forecast to increase the target rate this month for only the third time since late 2015.

The main question marks hanging over the outlook remain the labour market and bubbling house price growth in Sydney and Melbourne, which the Reserve Bank unquestionably described as "strong".

The dollar spiked briefly to as much as US76.26¢ after the announcement before returning to its pre-meeting level of about US76¢.

Any uncertainty is likely to lead to instability in the exchange rate, making it particularly difficult to anticapte future trends.

With the fed anticipated to move first on further raising the US interest rates, and strong economic numbers expected, plus the admittedly somewhat uncertain and so far unfunded promises on infrastructure spending and tax cuts by President Trump, the US Dollar should improve in strength.

Likewise, an improved economic outlook in Australia coupled with firming resource pricing are the underpinnings of a strong Australian Dollar. Yet Chinese growth is retreating and steel manufacturing capacity is to be curtailed.

Exactly how that plays out will be hard to forecast with certainty.

If you are looking for a certain bet, look no further than Sydney based FlashFX, cutting edge fintech startup. Engineered from the ground up to deliver transparent foreign exchange transfer services, without hidden fees typically imposed by the banks.

FlashFX is giving local financial institutions a run for their money by providing fast, secure and very competitive foreign exchange conversion services as an alternative to the existing opaque, siloed and inefficient banking networks.

Making your international transfers with FlashFX will give you a significant cost and time advantage over the banks, probably more than enough to make up for most of the anticipated uncertainty in short to medium term.

Using the innovative Ripple technology platform and XRP, Ripple's digital currency, FlashFX delivers extraordinary transparency, speed and transactional control to users.

Coupled with an exceptional user experience by delivering extraordinary user control built into the latest technology, FlashFX is setting a new level of service standard.

With FlashFX users pick the date; pick the rate; send funds like an email; track transfers like a package; all without any surprise charges. There are none.

This is in stark contrast to the banks, where global payments cost more, take more time, and the routeing is opaque.

So, whether you are a business or an individual you can now skip the banks and take control of your foreign exchange transfers.

How is your bank treating you? Do you know where your transfer process is up to and what the final cost is? Compare now!

Learn more about FlashFX and sign-up to benefit from cutting-edge technology, great rates, transparency and control.