RBA: Cash rate lowered, outlook still cautious - Commerzbank

This morning, the Reserve Bank of Australia lowered its key interest rate by 25 basis points to 3.6%, Commerzbank's FX analyst Volkmar Baur notes.

AUD is unlikely to benefit from the higher cash rate

"The decision had been expected by both the market and most analysts, so the AUD's initial reaction was muted. However, the written statement accompanying the unanimous decision contained few clues as to what to expect in the coming months."

"Although it was pointed out that inflation had already fallen significantly, the focus was once again on the risks and it was reiterated that the upcoming data must be awaited. Governor Bullock may provide further details at the press conference, which begins at 6:30 a.m. BST."

"According to Bloomberg, the market and most economists still expect at least two further cuts by the RBA in the coming months. We remain somewhat more cautious, however, and expect a difficult economic environment with inflation rising again amid continued weak growth. This is likely to make it difficult for the RBA to cut interest rates further. However, the AUD is unlikely to benefit from the higher cash rate due to the weak economy."