Australia’s central bank cut its benchmark interest rate by a quarter of a percentage point on Tuesday to a record low of 1% in a bid to boost the economy.
The cut is the second in consecutive months. Previously the Reserve Bank of Australia had not shifted the rate in almost three years.
The outlook for the global economy remained reasonable. But uncertainty generated by the trade and technology disputes was affecting investment and meant that the risks to the global economy were tilted to the downside, Lowe said.
The changes were widely expected after Lowe said in May that inflation was likely to remain below the bank’s target range of 2% to 3% a year and that a decrease in the cash rate would likely be appropriate.
I was expecting the Aussie Dollar to decline and continue to decline, but it didn’t.
This was the same thing that happened last month, the Aussie Dollar rose when they cut rates in June, but the Aussie Dollar rose on the news. I know first hand because I was stopped out on two of my AUD short positions.
What’s interesting right now is the Aussie Dollar formed a double bottom or what I call a “W” pattern.
Thus, I will be monitoring to see if the daily demand at 0.6960 will hold to confirm the “W” pattern.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.