The Australian dollar slipped to one-month lows on Tuesday after the Reserve Bank of Australia (RBA) cut rates to a three-year trough of 3.25 percent and left the door ajar for more easing. The Australian dollar skidded 0.6 percent to $1.0295, its lowest since September 7, as the market had not been fully priced for a move. Many economists had favoured November as a more likely window for a cut.
The RBA cited a darker global background, falling export prices and a high currency as the main factors weighing on the nation's economic outlook. Australian government bond futures rallied to two-month highs with the three-year contract jumping to a peak of 97.700. It easily pierced 97.717, the 61.8 percent of the June-August decline which opens the way to a possible test of 98.100, the 30-year peak hit in June.
The Aussie skidded to its weakest in a year against the kiwi at NZ$1.2414, having shaved almost five percent since a seven-month high in late July. The New Zealand dollar edged up to $0.8290, from $0.8270 in early trade, not far from a six-month high of $0.8357 on Friday.
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