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Early Monday morning in Asia, Bloomberg came out with the forecasts suggesting RBA’s dovish performance, depending upon a survey of 11 economists, while citing the disappointing GDP prints.

Key quotes

Australia’s central bank will boost its bond-buying program or cut interest rates to help revive the economy from its first recession in almost 30 years, a survey showed.

Reserve Bank will ramp up Quantitative Easing (QE) by expanding its bond purchasing program, with UBS Group AG’s George Tharenou positing that this could begin as soon as next month. Most of the others, however, expect it will occur either toward the end of this year or early 2021.

Cutting the cash rate and 3-year yield target to 0.10% was less popular. Of the three who said it was likely, Deutsche Bank AG’s Phil O’donaghoe expects the easing to happen by February and AMP Capital Investors Ltd.’s Shane Oliver similarly sees it in the next six months.

Bloomberg Economics’s James McIntyre anticipates such a move in November, which would be shortly after third-quarter inflation data and just before the RBA’s updated forecasts are released.

None of the survey respondents suggested the central bank would move to negative interest rates or directly intervene in the currency market.

FX implications

AUD/USD remains mostly unaffected around 0.7285 after the news. The reason could be traced from market consolidation.

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