RBA Cuts Benchmark Lending Rate

The Aussie remained within range against the greenback following a 25-basis point rate cut by the Reserve Bank of Australia to its lowest level in nearly half a century to 3.0%. In the accompanying statement however, the Bank provided few details as to whether additional policy easing can be expected over the coming months. The RBA continued to acknowledge that Australia’s economy is contracting, with capacity utilization falling from its peak, demand for labor declining and expectations for growth in labor costs seen further easing. Lastly, the Bank tempered the outlook for additional rate cuts, stating the current “stance of monetary policy will provide significant support to domestic demand over the period ahead”.