Traders are backing a further rate cut from the RBA in August

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It may be three months away but interest rates traders have wasted little time in pricing in the likelihood of a further 25 basis point rate cut from the RBA in August, attaching a 60% probability that the bank will follow up today’s move with another easing in August.

Of the 12 economists we’ve heard from so far, 11 are either forecasting or leaning towards a further rate cut from the RBA this year.

Adam Boyton, chief economist at Deutsche Bank, has the most bold call we’ve seen so far, forecasting that the cash rate will sit at just 1.25% by this time next year.

The NAB’s chief economist, Alan Oster, is the only economist who’s not favouring an additional rate cut, forecasting rate will remain at 1.75% for the foreseeable future.

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