RBA Cut Rates To Historical Low Of 0.50% Amid COVID-19 Concerns

RBA’s statement has made it clear that they are ready to continue their easing cycle if the COVID-19 situation does not improve. Short AUD/JPY?

RBA slashed rates earlier this morning from 0.75% to a historical low of 0.50%.

They mentioned that the COVID-19 outbreak has a significant effect on the Australian economy and according to the Organisation for Economic Cooperation and Development (OECD), it could wipe at least 0.5% from Australia’s economic growth this year.

The move to cut rates further was to support an already weak Australian economy amid a housing downturn.

Governor Lowe concluded in his statements that RBA is ready to ease further if the situation continues to worsen.

However, Lowe remained optimistic that the Australian economy could rebound once the outbreak is under control.

In our opinion, we feel that the spread of the outbreak has just started in Europe and more new cases are reported in the US every day.

Having said that, we feel that RBA may ease further by cutting rates further to 0.25% in the upcoming meeting even if fiscal support is provided.

AUD/JPY could fall lower towards 69.40 after price broke a critical uptrend support.

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