The Australian dollar sank today amid speculations that the Reserve Bank of Australia may perform another interest cut after it has already slashed borrowing costs earlier this month.
Australia’s central bank has surprised markets at the beginning of May, making an unexpected cut for its key interest rate. One of the reasons for the decision was the surprisingly low inflation rate. RBA Governor Glenn Stevens was speaking overnight, mentioning the vulnerability of the Australian economy. Such comments fueled speculations that the central bank is going to reduce lending rates once again, perhaps as soon as the next meeting on June 7.
AUD/USD tumbled from 1% from 0.7221 to 0.7158 as of 12:23 GMT today, trading near the lowest level since March 1. AUD/JPY slid from 78.87 to 78.54.
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