The Reserve Bank of Australia is widely expected to cut the official interest rate by 25bps when it meets tomorrow.
Personally, I think there is a much greater liklihood of ‘no change’ than there is of a ’50 bps cut’, but a 25bps cut is still the popular choice. Lots of people were screaming for the ECB to cut 50 bps last week and I do not understand the hurry to get to 1% rates and lower. An additional 25bps, whether they come this month or next, makes no difference whatsoever to consumer confidence or spending/saving patterns. Central banks need to keep some ammunition dry.
AUD/USD should encounter strong resistance at .7235/50 and support on the day is expected at .7100. It currently trades very quietly at .7155.
