In money news that will affect your hip pocket this week.
Aussie dollar and RBA
Ask most economists and they’ll tell you the Australian dollar should be lower than where it’s trading right now around $US0.76. But delays in raising interest rates in the United States, among other factors have boosted the Aussie dollar from the $US0.69 range that it sank to last year.
This not only adds to expectations that the Reserve Bank of Australia may have to cut rates to below the current 1.5 per cent setting – although unlikely this month – but it’s also forcing up the price of imported goods such as the iphone.
According to a news.com.au report which sites CommSec chief economist Craig James said Australia is no longer as dirt cheap place as it once was to but Apple’s products. In a report he said that products like the ipad could be bought $200 cheaper in Hong Kong or Indonesia – which is good to know if you are planning a trip overseas.
The rental market is still a tough place to crack into if you live in popular parts of New South Wales and Victoria. According to the Australian Financial Review one in five Victorians are having to offer $100 more on the advertised rental price as they try to coax homeowners to accept their application over others.
Bank interest rates
The attractive interest rate discounts offered by major banks on home loans are being cut back following intense competition and claims of unfair tactics by smaller lenders.
According to smh.com.au Aussie Home Loans, which is part owned by Commonwealth Bank of Australia, claims that the big four banks have cut the size of interest rate discounts for new mortgage customers. These discounts can be 1 to 1.5 per cent and take thousands of dollars off the cost of repayments on the average home loan each year.