Mortgage rates are unchanged from yesterday.
Stocks are rallying and the US dollar is weaker this morning thanks to news out of Australia that they have increased short-term interest rates. How does Australia raising rates impact markets in the US?
First, by increasing short-term interest rates Australia is signaling that they are unwinding stimulus to their economy which is a sign that their confidence about an economic turn around has grown.
Second, short-term Australian investments such as short-term notes and CDs now appear more attractive to the global investment community. As a result there will be less demand for US-denominated assets which has pressured the US dollar lower. In fact, gold is now trading near all-time highs at $1,040/ ounce.
Both of these factors are not favorable to interest rates. We remain in a locking position with rates at all-time lows.
Current outlook: locking