High chances of a rate cut by the RBA

High chances of a rate cut by the RBA

The Reserve bank of Australia will release the rate statement and announce the update on the interest rate on February 4, at 5:30 MT time. 

Instruments to trade: AUD/USD, AUD/JPY, AUD/CHF, AUD/NZD

The market expects the RBA to cut its interest rate from 0.75% to 0.5% during the February meeting. What may drive the central bank to do so? Firstly, it is the inflation rate. Despite an upbeat CPI released last week, the level remains below the RBA target. Thus, the bank may need to take accommodative measures. At the same time, the unemployment level remains pretty high at 5.1%. Let's not forget other risks including bushfires in Australia and coronavirus. Both of them are proven to have a great impact on the economy. That is why the Australian regulator may take some serious steps to support the economy of the country. As a rule, the shift towards more easing will weaken the Australian dollar. 

• If the RBA cuts its interest rate, the AUD will fall;

• If the RBA keeps the interest rate unchanged, the AUD will rise. 

Check the economic calendar 

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