The Reserve Bank of Australia Could Hold Off on Rate Hikes

Aussie performance in forex tradingEven thought the Aussie is rallying in f[B]orex trading[/B] (despite the risk aversion present), there are concerns that the rally could come to an abrupt end if the Reserve Bank of Australia decides to [B]halt its rate hikes[/B].

Australia is in a bit of a delicate position right now, with its strong economic growth, but concerned about the more sluggish prospects of the wider global economy. GFT’s [B]Boris Schlossberg [/B]reports in FX360 on the RBA’s position:

Australian fiscal officials also adopted a relatively cautious tone, with Treasurer Wayne Swan noting that inflation pressures “remain subdued.” [B]Australian policymakers must balance the strong domestic recovery against the much more lackluster rebound in global demand[/B].

China could help solve the balance problem, though. The country is limiting its lending in an effort to slow its growth, and that may result in a slowing for the Australian economy as well.

[B]See Also[/B]

[li]Rate Hikes and Australia[/li]Forex trading on the currency market