The Reserve Bank of Australia just announced the Cash Rate Target is cut by 0.25% to a fresh record low of 1.00%. This outcome was largely priced in prior to the announcement.
The pertinent points in the RBA’s accompanying statement were:
• Will monitor developments in labour markets closely
• Took decision to support employment growth
• To adjust policy to support sustainable growth
• Took decision to provide greater confidence on inflation
• Needs faster progress in reducing unemployment
• Conditions in housing market remain soft
• Main domestic uncertainty continues to be household consumption
• Economy can sustain lower rate of unemployment
• Employment growth continues to be strong
• Signs that house prices are stabilising in Sydney and Melbourne
• Little inroads in spare capacity in labour market of late
• Central scenario for underlying inflation to be 2% in 2020
• Outlook for global economy remains reasonable
• Downside risks from trade disputes affecting business investment globally
• AUD at low end of narrow range
Below is the link to the RBA’s media release:
The AUD is a marginally higher in immediate response.
Current indicative levels are:
AUD-USD 0.6965 / 0.6990
AUD-EUR 0.6170 / 0.6195
AUD-GBP 0.5510 / 0.5535
AUD-JPY 75.50 / 75.75
AUD-NZD 1.0435 / 1.0460
The next RBA Cash Rate policy meeting will be held on Tuesday 6th August 2019.
Please get in touch with us for more information or pricing.
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