Sliding dollar eases pressure on rate cut calls

Sliding dollar eases pressure on rate cut calls. The dollar is rapidly falling towards Reserve Bank of Australia governor Glenn Stevens' preferred US75¢ level, reducing pressure for a cut in official interest rates next week. The currency hit US78.55¢ on -Monday, the lowest level since mid-2009... Three of Australia's four big -banks are tipping near-term rate cuts and calls for the Reserve Bank to push the official cash rate to 2.25 per cent from its -current 2.5 per cent may intensify if Wednesday's fourth-quarter inflation report shows price pressures have -softened faster than expected. Annette Beacher from TD Securities says the falling dollar has eased pressure, The market is doing the work for the Reserve Bank in a nice, orderly -correction in the currency. The currency 18 months ago was at US$1.05 and people were saying all -Australia's economic woes would be fixed at US95¢. Then we got to US85¢ and here we are at US78¢... It means other sectors of exports can pick up the slack, given the massive pick-up in the currency. Full article (paywall) (VIEW LINK)


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