The New Zealand dollar eased against the Aussie after the Reserve Bank of Australia noted signs of improvement in that country's housing market and reiterated its view on inflation for 2020.
The Reserve Bank has cut interest rates to an historic low of 1 per cent, as it stares down the twin issues of rising unemployment and a slowing economy.
Australia's central bank has cut its benchmark interest rate by a quarter of a percentage point to a new record low of 1% in a bid to boost the economy.
JPMorgan's gauge of global manufacturing fell to its weakest in nearly seven years, contracting for the second month in a row, while Morgan Stanley's surveys showed world manufacturing shrinking for the first time since 2016.
Inevitably, the Australian dollar will continue to track changes in expectations for future interest rates and for these "the unemployment rate will be a key indicator" going forward, says Fidelity's Anthony Doyle. "Business confidence appears to have improved after the federal election while the risk of a deterioration in US-China trade talks has abated for now", Hogan said. Yet the governor left his options open in the event further support is needed.
Mr Carney said that global trade headwinds had put pressure on the United Kingdom economy, adding that "rationales for action are broadening" - a comment that was interpreted by market analysts as a hint to further cuts from the central bank.
"We will be closely monitoring how things evolve over coming months", Lowe said. National Australia Bank also cut variable home loan rates by 0.19 percentage points and Westpac by 0.2 percentage points. Governor Philip Lowe said on Tuesday, the decision was made to stimulate economic growth and "provide greater confidence that inflation will be consistent with the medium-term target".
Canstar data shows that only three-quarters of lenders reduced their variable rates following last month's RBA cut, with the average reduction in variable rate home loans being 22bps.
Scott said the government is facing a big economic challenge.
Structural problems remain: the central bank needs annual growth of more than 2.75% in order to soak up spare capacity and drive down unemployment.
Lowe urged the ruling centre-right coalition to boost infrastructure spending, highlighting the government can now borrow at considerably low rates.
NAB's chief customer officer of consumer banking, Mike Baird, said the bank would limit the amount it cut deposit rates to 19 basis points, the same as its mortgage rate cut. Board members observed that underlying inflation had been below the 2% to 3% target range for three years, reflecting the sluggish growth in wages.
The economy Down Under has slowed in recent quarters and is on track for its weakest fiscal year since 1991.
A rate cut has already been ~82% priced in so I reckon there isn't much scope for the aussie to drastically fall unless the RBA sends out a dovish signal by committing to further cuts down the road (next one likely to only be in November).