In short
- The Australian dollar went down before the interest rate announcement, bounced higher straight after the announcement then fell sharply
- Broad losses against the New Zealand Dollar, British Pound, Japanese Yen or Euro
- The RBA also expected to cut rates next month to 0.75%
AUD to USD exchange rate
| Time | Open | Low | High |
|---|---|---|---|
| Today | 0.6751 | ||
| Yesterday | 0.6768 | 0.6734 | |
| In the last week | 0.6747 | 0.6801 | |
| In the 3 months | 0.6734 | 0.6710 |
What just happened?
The RBA met today and announced that official interest rates are to be cut by 0.25% to 0.75%.
While this was largely expected, most market analysts poured through the statement that came with the release.
If the statement isn't consistent with what the market has already forecast, there can be some volatility. Volatility can also be a result of traders either taking some profit or exiting a position they may have had leading into the news.
In this case, it was unusual to see both a brief spike up and a strong move down however after it was all said and done, the Australian dollar only ended up slightly lower than it's open today.
Up Next
Later next week, Australia will also get some Trade Balance data which will show the growth in both exports and imports in August.
Overseas, these are the most important economic announcements to watch out for:
Tuesday in Europe, the CPI data is released. CPI is a measure of inflation and can have a big impact on interest rates and the currency.
Also on Tuesday in the US, some important manufacturing figures are out. Later in the week, the Non Farm Payrolls for September come out. This is a measure of employment.
At the end of the week, the head of the US Federal Reserve, Jerome Powell is set to give a speech.
