The Reserve Bank of Australia cut interest rates 25 basis points from 3.00% to 2.75% hitting a record low. The Forex market is already reacting heavily. The AUDUSD broke through the critical 1.0220 support level and could now be on it’s way to 1.01. If the 1.01 level is broken, there is no telling how low the AUDUSD can go in the near future.
“The board has previously noted that the inflation outlook would afford scope to ease further,” RBA Governor Glen Stevens said. “At today’s meeting the board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy.” (Bloomberg)
As Australia joins the rest of the world in their rate-lowering endeavors, they are now only .25 basis points away from losing the title of the highest rates. New Zealand’s rates are currently resting at 2.50%.
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