Aussie dollar dives on talk of rate cut
Donald Trump's combative state of the union address on Tuesday night also added to gloom on markets
London — The Australian dollar nosedived after its central bank opened the door to a possible rate cut, in a remarkable shift from its long-standing tightening bias — a further indication of global economic slowdown. The policy shift caught some investors off-guard as only just the previous day the Reserve Bank of Australia had steered clear of an easing signal when holding its official cash rate at a record low 1.50% for the 30th straight month. The Australian dollar plunged 1.5% overnight and was set for its biggest daily drop in a year. Elias Haddad, rates and forex strategist, at Commonwealth Bank of Australia said that while there was a risk the Australian dollar could test $0.70, a more pronounced downward move was unlikely. "As a bank we have pushed out our call for a 25 basis-points rate hike by one year to November 2020 from November 2019," he said. Australia’s central bank is the latest to signal policy easing in the face of global economic headwinds. Last week, the US Fed...
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