RBA Adds to Global Liquidity Flood with a Rate Cut
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(eToro Blog) The Reserve Bank of Australia earlier lowered its benchmark cash rate by 25 basis points to 3.25% from 3.50%, citing a diminished economic outlook as a result of the high currency, lower export prices and a dampening of global growth prospects. While a consensus of economists polled had expected the rate cut, there were a fair number who believed that the RBA would hold out for another month to gauge third quarter inflation targets, thus markets had not yet priced in the move.
Glenn Stevens, the RBA governor, said that the RBA board had adjudged that with inflation target expectations likely to still be contained that they had room to maneuver and that the price cut was seen as necessary given the global economic circumstances. Even with the rate cut, core inflation is likely to hold near the RBA’s 2% to 3% target band, and analysts believe that that could set the stage for further rate cuts, with a possibility of another 50 basis points reduction over the next 12 months.
The AUD/USD pair is currently trading at 1.0306, falling from the day’s high of 1.0376; sentiment on OpenBook is bearish with 58% of traders selling against 42% buying. The EUR/AUD pair is trading higher at 1.2523, up from 1.2429 and sentiment on OpenBook is bullish with 54% of traders buying.
OpenBook guru mfmfuzz from Sri Lanka earned gains on the majority of his closed short positions, which ranged from 1.50% to 17.00%. The guru has a 99.9% allocation in the AUD/USD which has gained 2.7% over the past quarter. Over the same period, the guru’s realized equity was 159.3%. As of this writing, the guru has 7,193 followers and 2,278 copiers.
OpenBook trader orion77990 from Bosnia and Herzegovina earned 3% on a long position in the AUD/USD and 4.65% on a short position in the EUR/AUD. The trader has a 71.9% allocation in the AUD/USD pair which has earned 1.7% over the past quarter, and a 12.3% allocation in the EUR/AUD which earned 7% in the same period. The trader’s realized equity for the last quarter was 30.3%, which grew to 74.4% at the 6-month level and 48.4% for the last 12-months. As of this writing, the trader has 38 followers and 6 copiers.
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