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Immediate And Significant AUD Weakness Following RBA Rate Cuts

It is official. The Reserve Bank of Australia (RBA) has jumped on the bandwagon to ease monetary conditions, following in the footsteps of the Bank of Japan (BOJ) and the European Central Bank (ECB). The RBA has been under pressure to cut rates for days now due to the pressure of disinflation caused by low energy prices. However when the RBA moved, there was still a big impact on the Australian Dollar (AUD). The AUD dropped by 131 pips and counting from the opening price of 0.7801 to 0.7670 at the time of writing. More details of the price movement will be provided but first let us understand the background and reasons behind the RBA…