The pair started in Sydney at $0.7806 as the market looked ahead to one of the most highly anticipated RBA decisions in recent months. Ahead of the decision MNI noted that a rate cut was likely even though just 25% of 20 economists in MNI poll predicted such a cut. The money market was also pricing in 68% chance of a 25bps cut. Australia’s trade and building approvals data, also released this morning, were largely ignored as the aussie remained around the $0.7800 mark. Still, markets were jittery with aussie-dollar jumping briefly to a $0.7833 high and then quickly pulling back toward $0.7800 just before the RBA announcement. The decision to cut the cash rate was met by round of aussie selling, with aussie-dollar falling to a $0.7651 low, the lowest since May 19, 2009 when it traded a low of $0.7630, and aussie-yen also tumbling to a Y889.45 low vs Y81.83 high earlier. Market observers note the OIS market has now put the odds of an additional cut in March at 55%. Off the low, aussie-dollar ran into rumored demand to last trade at $0.7664. MNI analysts note a weekly channel base at $0.7575, with the May 18, 2009 low coming in at $0.7452.
