The Reserve Bank of Australia released its eagerly anticipated Monetary Policy Statement following on from the interest rate cut made earlier this week.
The RBA lowered its forecasts for growth in 2015 which in theory should have a weakening effect on the currency.
However, one of the most important statements was that there is an inherent risk to the property market if a rate cut happens.
With the property market in Australia already rising too quickly for the RBA’s liking a rate cut could send prices even higher and a bubble is never good for the economy.
Earlier this week China’s central bank announced that they would cut the level of funds needed by banks to keep in reserve.
This is an attempt to boost growth in the economy as Chinese GDP fell to its lowest level last year in 24 years.
This could be good news for the Australian economy as it means that there will be more money available and therefore more funds going into the Australian economy which could help to strengthen the Australian Dollar in the short term.
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