Australia cut their rates by 25 basis points to 3%. This matches their lowest rate in half a century.
In 2009, this rate was also reached by Australia during the global recession.
With the recent cash rate release, there has not been much movement Australian Dollar movement in the market. Since summer time, the AUD rate has dropped 50 basis and the Australian outlook isn’t particular impressive.
The Governor’s statements:
“The near-term outlook for non-residential building investment, and investment generally outside the resources sector, remains relatively subdued,” Reserve Bank of Australia (RBA) Governor Glen Stevens said.
Mr. Stevens also said the Australia interest rate cut is “appropriate now” and will assist other areas of the economy while the mining market hits it’s peak.
“There are signs of easier conditions starting to have some of the expected effects, though the exchange rate remains higher than might have been expected, given the observed decline in export prices and the weaker global outlook,” Stevens added and, “Private consumption spending is expected to grow, but a return to the very strong growth of some years ago is unlikely.”
It is hard to say what the Australian Dollar will look like 6 months from now. With global turmoil in Europe, America, and Japan, it’s possible that the AUD could become a top rated safe haven, boosting it’s value in spite of it’s own difficulties.
For the full RBA report, visit this page.
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