Market News & Analysis

Top Story

RBA Cut Rates To A New Record Low Of 1pct

Today the RBA opted to cut rates for a second consecutive meeting, taking their cash rate to a fresh record low of 1%.

Indeed, the cut had been widely expected yet the statement lacked a clear easing bias. Perhaps Philip Lowe will add his dovish punch in a few hours to help topple AUD and lift the ASX200 to new highs, but it must be said the statement was slightly less gloomy over the Australian and Global economy, in a post-G20 world, with the outlook for the Australian and global economy now touted as ‘reasonable’.

The final paragraph included a subtle ‘if’ which suggests RBA may not be in such a rush to cut in August unless pressed. Of course, they’ll “continue to monitor developments in the labour market closely” which leaves potential for further easing, but given that the RBA have not cut at three meetings in a row since the depths of the GFC, then a hold in August is plausible if employment data doesn’t falter.

From here, it’s all eyes on Philip Lowe in a few hours because if he steers clear of his usual dovish rhetoric, he could send AUD higher and spoil the nice bullish flag pattern on the ASX200. But if he does come out swinging, it’s likely we’ve seen the top on AUD/USD.

Yesterday’s key reversal day suggests the top could be in, and interesting to note its range almost perfectly spanned the area between the 50 and 100-day MA’s. However, with it back below 70c, we’d prefer to fade into moves beneath yesterday’s high, with a view for it to break beneath 0.6938 and head for the 2016 lows.



Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.