The Reserve Bank of Australia announced that it had reduced its interest rate to its lowest standing since 1960 at 3.00 percent today. The RBA had held the 3.25 percent cash rate steady at its last meeting in March after slashing the rate by 100 basis points in each of its meetings 
in December and February. The RBA has now slashed the interest rate by 425 basis points since September when the rate was 7.25 percent. Today’s rate cut was expected by the markets with most expectations of between a 25 point and 50 point reduction.
Glenn Stevens, RBA Governor of Monetary Policy, commented on the Australian economy in the report, “The Australian economy is contracting, though by less than those of its trading partners. Capacity utilisation has fallen from its peak, and will decline further over the rest of the year. With demand for labour weakening, growth in labour costs will probably also fall. Hence inflation over the medium term is likely to be lower than it has been over the past two years.”
Australian dollar mostly higher in Currency Trading.
The Australian dollar has been gaining ground in currency trading against most of the major currencies today after the rate announcement. The Australian dollar has advanced versus the U.S. dollar to 0.7120 AUD per USD in the US at 3:36pm EST after opening at the exchange rate this morning of 0.7096(00:00 GMT).
The Aussie dollar has increased versus the Japanese yen with the AUD/JPY trading at 71.51 from today’s opening exchange rate of approximately 71.27 yen per aussie. The euro has also fallen versus the aussie today and the EUR/AUD trades at 1.8636 aussie per euro after opening the day at approximately 1.8831.
The aussie dollar has also advanced against the New Zealand kiwi as the AUD/NZD trades at 1.2386 kiwi per aussie after opening the day at at 1.2193. Meanwhile, against the Canadian dollar, the aussie has decreased from the 0.8822 opening rate to trading at 0.8807 later in the North American trading session.
AUD/NZD Chart – The Australian Dollar has advanced almost 200 pips today against the New Zealand Dollar in Forex Trading.
