This morning's rate statement by Reserve Bank of Australia Governor Glenn Stevens hinted at an impending rate adjustment sometime in the coming months. The hawkish sentiment expressed by the RBA governor has so far helped the Australian dollar (AUD) jump broadly against its currency counterparts.
Stevens conditioned his statement, however, by noting that the point at which rates are increased is to be determined by the board. At the moment, there does not seem to be enough data to warrant a rate adjustment in the immediate future, but sometime in the later months of 2011. It was highlighted that pricing data released in late July will likely provide the necessary information to guide the interest rate adjustment.
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The Royal Institute of Royal Surveyors (RICS) published a report showing an increase in house price declines this morning. The RICS House Price Balance report gauges the level of a diffusion index based on surveyed property surveyors who were asked whether housing prices in their districts were rising or declining.
Forecasts surrounding this report were anticipating a return of approximately 20% of surveyors reporting a price decline. When 28% of RICS surveyors reported a decline, investors took cues that the British housing sector may still be in a ragged state and began to push against the nation's currency in early trading.
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