By Perry Mitchell
The AUD held onto modest gains following yesterday’s RBA meeting in Darwin. As widely expected the RBA matched wide market consensus of announcing a 0.25% cut to its benchmark cash rate, taking it to a historic low of 1% from 1.25%. In a speech following on from the decision, Governor Lowe cited the downside risks to global growth from the US-China Trade tension.
Also highlighting that strong commodity prices, reduced borrowing costs, and rising household incomes were still reasons to remain optimistic in Australia. Governor Lowe also noted that the RBA remains ‘prepared to adjust interest rates again if needed’ to get the economy closer to full employment and meet its inflation targets. Suggesting that the RBA still has an easing bias and keeping the door open for further cuts in the near future.
We now await the release of Australian Building Permits and Trade Balance data for fresh impulse on the AUD, both being released at 11:30 AEST today. It should also be noted that there has been silence at the US-China front that might push markets towards searching for more information from there. Focus then turns to tonight’s US ADP employment data with 140K new jobs expected, which comes ahead of the key US non-farm payrolls release on Friday night.
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