Traders surprised by Australian rate cut
The Reserve Bank of Australia (RBA) surprised the market with its decision to cut its benchmark interest rate by 25 basis points to 2.75% on May 7, and traders are now positioning themselves short the Australian dollar, expecting a gradual fall below parity with the US dollar.
The RBA decision, which according to governor Glenn Stevens was taken to encourage sustainable growth in the economy, saw the Aussie take a dive last week. Having traded as high as 1.06 a month ago, AUD/USD fell to 1.0024
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