Aussie Trends Ready for Higher Rates

Aussie Trends Ready for Higher Rates

The Australian economy has shown a good deal of resiliency in 2015 and this has helped to stabilize the financial markets in several key areas.  This is important because there are many key implications for how these trends are likely to unfold in 2016.  For some analysts, the broader trends in the financial markets suggest that we would see higher interest rates (and higher currency values) for the Australian market next year.

Next Actions at the Bank of Australia

Of course, the key body to watch here is the Bank of Australia (BOA), as this is where changes in interest rates are first discussed and made available to the public.  Higher interest rates generally mean a lower stock market and a higher currency value.  So if we do start to see commentary from the BOA suggesting that higher interest rates are on the wake, it would likely propel the Australian Dollar higher while putting pressure on regional stocks. If you are looking to start placing trades based on these trends, excellent brokers like FiboGroup offer broker forex trading for individual clients.

This is important because these trends give investors great clues for where money should be placed next year and beyond.  The real question here is whether or not the BOA thinks that the national economy can withstand higher interest rates.  Higher interest rates tend to create slowdowns in consumer spending activity, so there is some risk for weaker economic data across the country if we do start to see changes in these policy tactics.

In any case, it will be important to watch for any major changes here — even if you are not looking to implemented specific trade ideas as a result.  But at the same time, it should be clear that the market will move if the BOA decideds to pull the trigger and actually raise interest rates.  Perhaps the greatest impact in this scenario would be seen in the Australian Dollar itself, as trends in the stock market have largely started to stabilize.  Be aware of any new trends here, as any major commentary will almost certainly make the larger financial news headlines in the country.