AUD/USD slips to three-week lows on aggressive RBA rate cut calls

• AUD/USD drops to lowest since May 24.
• RBA to cut rates to 0.75% this year, according to NAB.
• The aggressive rate cut forecasts are likely hurting the Aussie Dollar.

Australian Dollar is being offered this Friday morning, possibly in response to growing calls for aggressive RBA rate cuts in 2019.

The National Bank of Australia (NAB) has reportedly put out forecasts calling for three rate cuts this year. The bank had predicted two rate cuts earlier this year.

NAB’s forecast comes three weeks after Westpac – one of the big 4 Australian banks – revised its 2019 RBA interest rate cut forecast from two to three.

With growing calls for aggressive easing, the markets may begin pricing the possibility of RBA reducing rates three times this year, keeping the AUD under pressure. It is worth noting up until now markets were priced in for two rate cuts. 

It is worth noting that the Reserve Bank of Australia cut rates by 25 basis points to a new record low of 1.25% earlier this month and Westpac and NAB see rates falling to 0.75% by the end of December.

The AUD/USD pair is currently trading at 0.6898, representing 0.24% drop on the day. The pair hit a low of 0.6892 soon before press time – a level last seen on May 24.

Aussie may trim losses during the day ahead if China’s retail sales and industrial production numbers for May blow past expectations.

Technical Levels