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RBA cuts interest rates in Australia

AUDUSD News by Newsroom on 03:59 May 05, 2015 EST
Australian central bank cut the base interest rate by a quarter down to a record low of 2.00% last night.

After the news release the Australian dollar dropped as it would be expected after a rate cut and AUDUSD traded below 0.7750, more than 100 pips below just before the cut. However, this proved a knee jerk reaction as the Aussie sprang back and made a week high at 0.79, 50 pips above before the price ahead of the RBA announcement. Other AUD related pair behaved in similar fashion.

On its statement RBA said inflation outlook remains consistent with its target over the next two years and that further depreciation of the Australian dollar is both likely and necessary. The rate cut should reinforce encouraging trends in demand.