The last few weeks have been tough ones on the Australian share market with all but wiped away any gains for 2013. This has been sparked by fears that central banks in the US will pull the pin on cheap money.
At one point last week the ASX 200 hit an intraday low of 4658 points - only slightly above where it was at the start of the year, at 4644. The All Ords hit its lowest point of the year at 4650 points.
The market has now fallen 10.1 per cent since its highest close for the year in mid-May, entering into what is widely considered a correction. Tonight is also big for the market with the US federal announcement bound to have knock on effects for our market......we wait and hope it is good news.
The good news is for home owners with the Reserve Bank of Australia has indicated it is prepared to cut the cash rate further even though the Australian dollar is falling. In its June board meeting minutes, the central bank says the high Australian dollar has been a drag on much of the non-mining sectors of the Australian economy.
The RBA has said ‘‘The exchange rate remained at a high level considering the decline in export prices over the past year and a half. It was possible that the exchange rate would depreciate further over time, as the terms of trade declined, which would help foster a rebalancing of growth in the economy.’’
It is going to be an interesting 24 hours - happy trading
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