Forex News: Aussie Rallies as RBA Cut Rates to 3.00 Percent
THE TAKEAWAY: RBA Cut rates by 25 basis points to 3.00 percent > Policy action in-line with market expectations calling for rate cut > Aussie trades higher
The Australian Dollar rallied versus the U.S. Dollar as the Reserve Bank of Australia cut the benchmark lending rate by 25 basis points to 3.00 percent which was in-line with market expectations of a 90 percent probability that the RBA would cut the cost of capital today.
Policy officials said the rate cut will ‘help to foster sustainable growth’ and that global growth is expected to be ‘below average for a time’. Moreover the central bank noted ‘risk remains to the downside’ and the exchange rate is still ‘higher than might be expected’.
The technical reading on the AUD/USD pair would suggest that Forex traders may refrain from bidding the Aussie higher as price action appears to be near a major weekly level of resistance initially established from the August 2011 highs.
AUD/USD, 1 Minute Chart
AUD/USD, Weekly Chart