From Stephen Koukoulas: There is a strong misconception that the recent dip in the Australian dollar will deter the RBA from cutting interest rates

From Stephen Koukoulas: There is a strong misconception that the recent dip in the Australian dollar will deter the RBA from cutting interest rates. In fact, a weak dollar based on faltering global and domestic conditions will reinforce the RBA's resolve to cut rates in the months ahead. Over the past 20 years, when the RBA has implemented loose monetary policy and rates are low, the currency has also been low or falling. Growth and inflation risks are subdued in these circumstances, which gives the bank freedom to implement looser monetary policy with investors inevitably pushing the currency lower. (VIEW LINK)


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