Further rate cuts on the cards

Morgan Stanley tips RBA to cut to 1pc, ASX at 4800

 

strong buy signal..

 

A lot of that seems likely, but I don't understand why that would see an end to the hunt for yield in the short term?

Interest rates at 1pc, xjo falling, no sign of an imminent turnaround, surely makes investment trusts and defensives with grossed up yields in the high single digits attractive? Seems as good a place as any to put your money at the moment...

 

Has anyone looked at the current money play, if interest rates drop and seems likely it will mean further falls in Australian $.

I have been transferred funds to my US bank accounts.

However, there is a bank in Australia that trades Au$ to US or any currency and you don't need to physically transfer funds overseas. I am sure some here know more about this?

Au$ 71 now, if it breaks the barrier of 70 we could see it slip sliding.
ANZ Bank predicting Au$ may hit 50.... ouch

 

Do you want to know which one? Citi and HSBC do that. HSBC has good account options for foreign currency traders. But the rates are a killer and they also charge a fee on withdrawal

 

Right, I did not realise this. I just thought would be great option for investors if they feel comfortable with this strategy.

 

Yes, anyone not physically transferring your cash which charge a lot of fee I believe

 

Open a trading account and park your cash there. Don't trade just park it there

 

Would the trading account base currency be different to AUD?

 

@austing and @The Falcon, what are the ETFs/LICs and to look at as strategies to fight a falling AUD against USD? ( or at least profit from it )

 

Anything that tracks USD and is unhedged. Could be the S&P500, gold, ETFs like VGS or the other USD denominated ETFs and of course anything that's listed on a US stock exchange.

 

Sounds pretty good to me.

Perhaps US Dollar ETF | BetaShares if you're into this sort of thing.

 

There is a USD ETF traded on ASX. Look for that and go long/short on it

 

Why don't you just buy USD?

 

Sorry, just not that familiar with the best mechanisms for doing it - other than having a USD bank account.

One of the constraints as well is if I wanted to buy USD within the context of the direct investment facility in my Super.

 

Evans, Westpac: "We continue to expect that the Reserve Bank Board will decide to cut rates by 25bps at its meeting on August 2. However we do expect that 1.5% will be the low point in the cycle, given our outlook for growth and the unemployment rate."

June CPI figures due out on July 27.

 

@petewargent thanks for sharing that. Interesting to hear Westpacs thoughts on picking the bottom of the interest rate cycle. Hope they are right. As an investor I actually want interest rates to slowly start increasing because IMHO that will be an indicator of hopefully stronger macro-economic ealth for Australia - something we really need!

 

I read @petewargent 's blog most days. Fascinating reading for the more geeky and stat inclined. Im kind of hoping for a rate cut short term to help lower the AUD and fire up the ASX.

Although, I agree with @C-mac that yeah eventually a rate increase would be a good thing as long as its not the RBA defending the AUD from doing a turkish lira or russian rouble.