Aussie-dollar started the day near $1.0360 and then ran into selling pressure mainly through demand for euro-aussie cross, which eventually pushed aussie-dollar down to a $1.0352 morning low. Aussie-dollar recovered soon after to trade a late morning high of $1.0375, before easing to around $1.0370 as the market then settled back to wait for the Reserve Bank of Australia’s decision. The RBA decided to lower the official cash rate target by 25 basis points to 3.25% today amid concerns about the weak outlook for the global economy. “At today’s meeting, the board judged that, on the back of international developments, the growth outlook for next year looked a little weaker, while inflation was expected to be consistent with the target,” the RBA said. “The board therefore decided that it was appropriate for the stance of monetary policy to be a little more accommodative.” Aussie-dollar fell sharply to a low of $1.0315 soon after the RBA decision, which caught some in the market by surprise. Although the decision was expected to be a close one, the majority of economists had expected the RBA to stay on hold.
EasyForexNews Research Team