The Australian dollar is tumbling as rate cut bets surge

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The Australian dollar has tumbled in Asian trade on Friday, falling below 74 cents for the first time since March 7.

The AUD/USD sitting down 0.87% for the session, with the catalyst being a series of downgrades to the RBA’s inflation forecasts in its quarterly statement on monetary policy released earlier in the session.

The bank now sees core inflation sitting below its 2-3% medium-term target band by the end of 2016, something that has seen expectations for a second rate cut from the bank later this year surge in response.

According to cash rate futures, markets now see a greater than 70% chance that the RBA will cut the official cash rate to 1.5% at its August meeting, something that will follow the release of the June quarter CPI report from the ABS in late July.

The AUD/USD currently buys .7397, leaving it down more than 5.5% from April 21.

Here’s the daily chart, courtesy of

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