FX.co ★ Australian Dollar Falls After RBA Decision

The Australian dollar slipped below $0.650 on Tuesday, continuing its downward trend from the prior day, as investors digested the Reserve Bank of Australia's latest monetary policy announcement. As anticipated, the central bank reduced interest rates by 25 basis points for the third instance this year, lowering the official cash rate to a two-year low of 3.60%. This decision reflects diminishing inflationary pressures and a weakening labor market, although the RBA expressed caution regarding the possibility of additional rate cuts. Additionally, the RBA board highlighted that core inflation is projected to move towards the midpoint of its 2% to 3% target range, even with a gradual easing of policy. On the international trade front, the current US-China trade ceasefire has been extended for another 90 days—an optimistic step intended to lessen tensions, provide more time for negotiations, and decrease the likelihood of further intensification in the trade dispute.