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Rate cut bets soar as RBA shifts expectations
Late on Wednesday evening something extraordinary happened to the probability of the Reserve Bank of Australia lowering the target cash rate at its February board meeting. After surprisingly strong inflation data were released on Wednesday at 11.30am, the likelihood of a February cut slumped from 43 per cent to just 7 per cent (based on the pricing of the February interbank futures contract). The meeting had apparently gone from being very “live” to virtually no chance of a move. Having plumbed US78¢ in the preceding 24 hours, the Aussie dollar surged to over US80¢, dashing the hopes of many traders punting on ... (full story)