In a speech on “The Labour Market and Spare Capacity” delivered today, RBA Governor Philip Lowe reaffirmed that the central bank is on track for further rate cuts again. He said that would be “unrealistic to expect that lowering interest rates by ¼ of a percentage point will materially shift the path we look to be on.” And, “the most recent data – including the GDP and labour market data – do not suggest we are making any inroads into the economy’s spare capacity.”

Therefore, “it is not unrealistic to expect a further reduction in the cash rate as the Board seeks to wind back spare capacity in the economy and deliver inflation outcomes in line with the medium-term target.” Though, he also emphasized that Australia should also look into other options to get closer to full employment, including fiscal policy and structural policies.

His full speech here.

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Australian Dollar is the second weakest for today so far, just next to Dollar.

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