Money markets have all of a 25 bp cut priced in for tomorrow and a better than 50% chance of a 50 bp cut.
The Chinese slowdown is dampening demand for Australian raw materials and undermining the boom-town atmosphere surrounding Australia for the last half-decade. Demand from Asian central banks for AUD/USD is likely to be trimmed as they turn from accumulators of reserves to sellers of reserves to underpin sinking domestic currencies, a double-whammy for the AUD.
If the global economy continues to cool, as looks likely, AUD will continue to struggle…
