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Interest Rates to hold

The RBA is widely expected to leave rates on hold until February 2011.

Last month, the Reserve Bank lifted rates by 25 basis points – the first rate hike in six months.

While there has been growing speculation that the RBA could lift rates again in December,  I think this is unlikely given the banks moving above the RBA this should keep rates on hold until most likely February 2011.

While I don’t see the next rate hike coming until February at the earliest, in a year’s time the cash rate is likely to have increased to around 5.5 per cent, which is likely to prove to be the peak for this cycle.

All four majors lifted up to 20 basis points ahead of the RBA earlier this month.