AUD/USD surges towards 0.79, RBA cuts but more upbeat

FXStreet (Bali) - Following a 25bp rate cut to 2% by the RBA, the AUD/USD initially sold off to 0.7790, session low, before a major bounce back towards 0.7910, currently easing off to 0.7870/75.

Market seems to have been very short going into the risk event, judging by the turn around in prices. Furthermore, reference to improved employment and household demand, together with inflation on target, appears to be suggesting market participants that the RBA may remain on hold for a more prolonged period of time, with some even speculating that the easing campaign might be over.