During last month The Reserve Bank of Australia sold a 5-year record amount of Australian Dollars in forex market that accounted for A$1.433 billion. During a month the Australian dollar rised by 6.4% against other major currencies. Without any pressure on the currency, Australian Dollar could be even higher. As a result, export profits could still be marginalized. In April, a testament to this theory, saw exports plummet by 11.3% where the currency rallied 6.6%.
Accompanying the official press release were comments by the bank saying that the influence that the cash rate has had on bank financing has weakened. Such a statement may indicate that further rate cuts may be in the cards for the RBA as the threat of credit tightening becomes more obvious.
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