Finance - Aussie Dollar Falls Against US Dollar
The Australian Dollar has fallen to less than 68 cents to the American Dollar, as the financial world expects the Reserve Bank to slash Australia's cash rate to a fresh record low of 0.75 percent on 1 October.
Citi, Commonwealth Bank, Westpac, and ANZ are bracing for that cut; NAB expects the rate cut next month and another one in December. The would take the cash rate to 0.5 per cent by the end of the year.
"The RBA has stated that the unemployment rate will need to fall to 4.5 per cent (its new estimate of full employment) for wages growth to lift sufficiently for consumer inflation to return to the 2-3 per cent target band," wrote Commonwealth Bank international economist and currency strategist Kim Mundy. "But yesterday's August employment report showed that that labour market slack is increasing rather than decreasing."
Australia's central bank already reduced borrowing costs twice this year, with back-to-back rate cuts in June and July.