AUD/USD slumps to fresh 5-1/2 yr lows as RBA cuts rates by 0.25bps

FXStreet (Mumbai) - AUD/USD plunged to fresh five and half year lows after the Reserve Bank of Australia (RBA) slashed its official cash rate (OCR) by 0.25 bps from 2.50% to record low of 2.25%.

Down from 0.7800 levels

Currently, the AUD/USD collapsed -1.72% and trades at fresh multi year lows of 0.7666 levels post the RBA announcement. The Aussie fell as RBA joined the easing club slashing key rates and maintained a dovish tone, noting, "at today's meeting, taking into account the flow of recent information and updated forecasts, the Board judged that, on balance, a further reduction in the cash rate was appropriate." "A lower exchange rate is likely to be needed to achieve balanced growth in the economy."

AUD/USD Technical Levels

The pair has an immediate resistance at 0.7800 levels, above which gains could be extended to 0.7833 levels. On the flip side, support is seen at 0.7650 from here it to 0.7600 levels

Feb 3, 2015

RBA cuts rate to a new record low of 2.25%

The Reserve Bank of Australia decided to cut the interest rate to a new record-low of 2.25% vs 2.5% prior, after strong speculation that the Central Bank would probably act amid global deflationary pressures. On the policy statement, a softer language was observed, noting that "at today's meeting, taking into account the flow of recent information and updated forecasts, the Board judged that, on balance, a further reduction in the cash rate was appropriate." As per the RBA's stance on the AUD, Stevens noted: "A lower exchange rate is likely to be needed to achieve balanced growth in the economy."

AUD/NZD hits 2-week low after RBA cut

AUD/NZD has dropped like a rock over 1.2 cents after the RBA decided to cut the interest rate by 25bp to 2.25% today, leading the exchange rate to trip stops sub 1.0620, printing a new 2-week low of 1.0574 before a rebound towards 1.0610/15 presently.