Finance, Forex and Investments

Would the recent increase of interest rates in Australia affects the currency rates to foreign country?

I recently heard about the news of Australian interest rates rise starting from August, and I'm concerned if this would affects the Australian currency rates to other countries? I need to find out would it be wiser for me to exchange more Australian Dollars with MYR (Malaysian Ringgit) before the new interest rates begins as I'm a International Students (currently studying in Australia) from Malaysia.

Public Comments

1. G'day, It has been rising since last year but no one can predict for sure what will the Reserve Bank will do for the next quarter. However the AUD rate has also risen quite alot compare to last month. If you are afraid of the increase in exchange rate (which will be likely, given the very good economic climate in Australi), I suggest send as much money as possible and split them into term deposit and high interest saving account (like the one offered by ING, ME or some other merchant banks). Hope this helps. Good luck for your study :)
2. In general when the interest rate rises the domestic currency appreciates. If country A raises rates to 5% while country B had rates of 4.5%, speculators will realise that they would get better returns by purchasing securities in country A. This will raise the demand for country A's currency so the currency will appreciate. My personal opinion (as in this is not investment advice so don't blame me if things turn out otherwise), would be to keep hold of your Australian $s as they are likely to appreciate relative to the Ringgit.