This morning, the Reserve Bank of Australia, once again brought its cash rate lower by 25bps. The euro continues to weaken against the US dollar. Commodities took a dive yesterday.
RBA Cuts Cash Rate
During the early hours of the European morning, the Reserve Bank of Australia once again cut its rate by 25bps, bringing it to +0.75%. This is the all-time low that the rate has eve been. Although the bank’s accompanying statement says that the overall outlook remains reasonable, still the risks are tilted more to the downside. The Bank is concerned about the ongoing trade tensions between China and the US, as it is affecting international trade flows. Advanced economies are showing that wage growth is picking up, but inflation remains low. Although the RBA is quite satisfied with its own domestic economy, one element continues to bother them is the outlook for consumer spending, as consumptions remains on the lower side.
Last year, the RBA stood aside from raising or lowering their cash rate, but this year, the RBA cut the rate by half from the beginning of this year, from +1.50% to +0.75%. In the Bank’s statement, they support such a...
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