RBA Cuts Its Interest Rate to a Record Low
Euro trade stable at 1.3250 level … tries to find direction.
Asian shares: Japan's Nikkei 1.00%, Hong Kong's Hang Seng -1.20%(07:00 GMT), Korea's Kospi -0.50%, Australia's ASX 200 -0.11% and China's Shanghai 0.52%.
Sterling rose to one-week highs yesterday after an industry survey gave hope the UK economy was recovering, before easing to $1.5320 in US trade.
The dollar extended losses against the yen into a third day on Tuesday as markets questioned their expectations the U.S. Federal Reserve would start scaling back its stimulus as soon as next month.
IMF: Japan should expand asset buying.
Australia's central bank cut its benchmark interest rate to a record low in a boost to Prime Minister Kevin Rudd's bid for a come-from-behind election win. Governor Glenn Stevens reduced the overnight cash-rate target by a quarter percentage point to 2.5 percent. Twenty-six of 27 economists surveyed by Bloomberg News predicted the eighth cut since late 2011, while money markets had priced in a reduction as a near certainty.
RBA Statement: Recent information is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year. Commodity prices have declined but, overall, remain at high levels by historical standards. Inflation has moderated over recent months in a number of countries. In Australia, the economy has been growing a bit below trend over the past year. This is expected to continue in the near term as the economy adjusts to lower levels of mining investment. The unemployment rate has edged higher. Recent data confirm that inflation has been consistent with the medium-term target. The Australian dollar has depreciated by around 15 per cent since early April, although it remains at a high level. It is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy.
The Australian dollar was up at $0.8980 level after the RBA's rate decision. It fell to 3-year lows at 0.8847 on Monday.
Australia job ads fall signals rise in unemployment. Job advertisements have fallen for the fifth-straight month in July and are 19 per cent below their levels a year ago.
In commodity markets, copper eased 0.3 percent to around $6,950 a ton, extending a 0.4 percent decline on Monday, while gold fell 0.7 percent after a 0.6 percent drop in the previous session. Brent crude prices dipped 0.2 percent at $108.50 a barrel, extending a 0.3 percent fall on Monday and heading for a third straight day of loss - which would be its longest losing run since late May.
Watch today: UK ind. prod., Germany factory orders.
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