AUD Reserve Bank Of Australia Rate Decision
The Reserve Bank of Australia (RBA) has the responsibility of keeping inflation at 2-3% by changing the overnight cash rate. In this way, price increases related to inflation remain stable.
The RBA is preparing to announce Tuesday morning their cash rate decision. It is expected that it will drop 0.25%. The Australian Dollar has already dropped in response to the forthcoming announcement since changes in the cash rate will have a major effect on interest rates. If predictions are correct interest rates are expected to be cut come Tuesday. Short term interest rates reflect the return on holding a currency and so the exchange rates are also affected. And with this, the Australian dollar is likely to depreciate.
This figure is a sensitive one and it tends to move markets upon its release and even upon expectations of the forthcoming release as we have seen today.
The Australian Retail Sales figure increased today to 0.5%, and though generally this figure is of great significance, it had only a small effect on the markets since everyone is waiting for tomorrow's announcement.
Stay tuned to see if the Australian dollar is going to further drop because of a cut in interest rates.
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