Two central banks delivered quarter-percentage-point rate cuts during the week: the Reserve Bank of Australia and the Bank of England. The results of those cuts were dramatically different, with the Aussie strengthening by one and a quarter US cents on the week while the pound lost half a US cent and three and a half Australian cents.
There were two reasons for the difference in investors' reactions. First, the RBA rate cut was exactly what the market had expected while the BoE stimulus package included restarting the quantitative easing programme and it was accompanied by the governor's threat - almost his promise - of even lower rates by year-end. Second, at 1.5% the RBA's Cash Rate is still hugely more attractive than anything on offer in North America, Europe and Japan.