RBA Will Have to Turn It Up a Notch to Weaken Australian Dollar

[kreslik.news]

Trader reaction to last week’s Reserve Bank of Australia’s decision to cut interest rates by 25-basis points to a historically low 1.50% indicates that another rate cut is likely coming before the end of the year.

It is also an indication that the market forces may be dragging the RBA towards adopting the unconventional zero-rate monetary policy that is currently taking place in Japan, the Euro Zone and the U.K. The RBA essentially confirmed this path when it said that inflation is likely to stay below or at the bottom of its target range until 2009.

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