RBA: Will they or won't they?

According to Capital Economics, the only way to weaken the Australian dollar, which in turn will support the real economy in the country is to lower the interest rate, which would give strength already "hot" housing market.

Other economists, including those of Goldman Sachs, Moody`s and AMP Capital, also expect cuts in interest rates by 0.25 basis points, which will lead to a record low 2 percent. According to Shane Oliver, market analyst and trader on Wall Street, the Australian central bank the possibility to take action on an increase in interest rates is great. He relied on weak outlook for business investment, but also warns that not be surprised if we see inaction by the Bank for the third consecutive month.

Cutting interest rates will inevitably devalue the Australian dollar, which would be in favor of exports and services, shared by Moody`s, but aim for a weaker Australian currency may not be enough to counter the disappointment of the Central Bank of housing prices, which have risen dramatically since the beginning of the year. In major cities, the increase is 7.9% by the end of April.

Not all, however, expect the RBA to "pull the trigger". HSBC predict a decrease in interest rates by the Central Bank in the third quarter of this year. "The reluctance RBA to cut interest rates in March and April can be interpreted as a desire for greater economic need before taking this important step," said Paul Blohman, chief economist at HSBC Australia.