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New RBA governor Philip Lowe says more interest rate cuts needed

AUDUSD News by Newsroom on 02:14 Octuber 18, 2016 EST
The Australian dollar is shrugging off comments from newly appointed RBA governor Lowe that more interest rates are needed to combat low inflation. The Aussie advances against the US dollar and trades in the 0.76 region, almost 2 cents above a week ago.

Lowe made this remark in a conference with Citi fund managers on Tuesday morning.

Because of the low unemployment rate and unusually low wage growth the RBA has room to reduce interest rates without breaching the top of the RBA's inflation target he explained. “this does not mean that we have drifted into a world of permanently lower inflation in Australia” he added.

The current headline inflation rate in Australia is 1 percent, much lower than the bank's medium-term target of 2 to 3 percent.