Whilst not totally unexpected, (the bookies are never too far wrong!), the normally conservative RBA has made a significant move to try and waken up the subdued Australian economy and housing market. The preliminary data which they are receiving is obviously worrying them, and with inflation not really an issue, then have taken a very aggressive line.
The AUD/USD has only fallen by 50 pips despite the RBA’s move, which shows just how strong the Sovereign demand remains; they don’t seem to care.
USD/JPY may come under some pressure now if AUD/JPY selling intensifies.
