The latest Reserve Bank Survey conducted by finder.com.au reveals that most experts believe the cash rate will remain static at 2% this year, and a significant number also expect the Australian dollar to fall considerably.
The survey included 31 of the country’s leading industry experts and economists, and 94% of them agreed that there would be no movement to the cash rate this year.
Several of the experts suggested that Prime Minister Malcolm Turnbull’s succession over Tony Abbott had an uplifting effect on the market, and the recent softening of the Australian dollar benefitted businesses that export their goods and services.
Sixty percent of the experts predict a rate rise next year, and the other 40% foresee a rise beyond 2016. About half of those who predicted the cash rate to increase next year expect the change to occur in the last quarter.
When it came to the matter of the Australian dollar’s future, opinions were divided. 76% of the 29 experts who answered this part of the survey are anticipating the Aussie dollar to drop below US$0.65 this cycle.
Fourteen percent predict the Australian dollar to hit its lowest point by the end of this calendar year and 72% believe this fall will happen in 2016, with 44% presuming that it will happen in the first half of next year.
“It’s daunting to think just last year, in July 2014, the Australian dollar was buying almost US$0.95 and we were trading at parity with the United States from June 2012 to May 2013,” said Money Expert Michelle Hutchison of finder.com.au.
“Fast forward to September 2015, and an overwhelming majority – 86 percent – of experts in our latest survey predict the Aussie dollar will fall to US$0.70 by the end of this calendar year, with over two in five believing it will plummet further – to US$0.65 – by year’s end.
“This can have a significant knock-on effect for Australians, especially those heading overseas this summer.”
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker