Australia’s dollar fell against all of its major peers, erasing earlier gains, after the central bank signaled it’s prepared to cut interest rates to a record- low this year after holding them unchanged today.
The inflation outlook “would afford scope to ease policy further, should that be necessary to support demand,” the Reserve Bank of Australia said in a statement today after today’s policy decision. Australia’s bonds rallied and New Zealand’s dollar fell as declines in global stocks demand boosted demand for haven assets.
“Aussie selling pressure stems from the comments that the RBA made that inflation outlook gives scope for further easing,” said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. “The market has taken that to mean the RBA is sitting ready to ease.”
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