The Australian dollar dipped today as the Reserve Bank of Australia cut its key cash rate more than analysts anticipated. The decrease of the rate was expected and perhaps priced in, but the scope of the cut took traders by surprise.
Since it last changed the cash rate in December, the Board has maintained the view that the setting of policy was appropriate for the time being, but that the inflation outlook would provide scope for easier monetary policy, if needed, to support demand. The accretion of evidence over recent months suggests that it is now appropriate for a further step in that direction.
AUD/USD slipped from 1.0427 to 1.0328 as of 12:56 GMT today. AUD/JPY was down from 83.18 to 82.40 and reached 82.09 — the lowest price since February 7.
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