The RBA announced at 2:30 pm today a cut in the cash rate of 25 basis point, bringing the rate down to 1.75%. Markets and the currency responded strongly; the AUD fell from 0.7706 to 0.7558 soon after the announcement, and the ASX200 jumped from 5269.4 to 5327.4 and continues to trade higher. Chris Caton, Chief Economist at BT Financial Group, called it a month ago; “there is one other factor that could precipitate a further rate cut; suppose that we get a surprisingly low CPI inflation result at end-April. A May rate cut cannot be ruled out completely.” More recently, Savanth Sebastian at Commsec declared today’s a ‘live’ meeting, saying “there’s a strong chance the Reserve Bank could cut the cash rate on Tuesday to a record low 1.75% following the release of weaker than expected March quarter inflation.”