The RBA announced at its monthly board meeting Tuesday that the cash rate would drop another 25 basis points to a record low of 1 per cent.
The news from the RBA at 2.30pm saw the ASX 200 trim its gains of around 29 points in the afternoon to 5.1% by the close while the Aussie dollar traded around 69.80 U.S. cents, which was a small rise.
The global investor spotlight will move to USA non-farm payrolls data due on Friday, which economists expect to have risen by 160,000 in June, compared with a 75,000 increase in May.
The Reserve Bank of Australia's (RBA) quarter-point cut took cash rates to an all-time low of just 1% and left limited room for more reductions, raising the possibility of unconventional policy easing. Data from property consultant CoreLogic out on Monday showed Sydney home values had risen in June for the first time in nearly two years.
"Lowe is speaking in Darwin, and that is really where the market will be looking for clues. but our view is we will get at least one more follow-up cut", said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.
RBA governor Philip Lowe: "We will achieve better outcomes for society as a whole if the various arms of public policy are all pointing in the same direction".
The Euro Australian Dollar (EUR/AUD) exchange rate fell by -0.3% today and is now trading around AU$1.6155 on the interbank market.
Mr Lawless added that lower rates were occurring at the same time the country's bank regulator made moves to relax lending requirements for borrowers.
The plan, widely sought amid a slowing economy, needs the support of three independents and minor parties to become law after the main opposition Labor party said it would oppose the legislation in Australia's upper house Senate, where the government does not have a majority.
"The problem the big four have now is their online savings rates are at 0.3% - there's not much distance to go anymore".
However, if you look at the bigger picture, the RBA was already behind the curve when it cut its cash rate in June so perhaps another cut today is warranted and will have a more profound impact towards the real economy - despite the anticipation.
The Euro, however would also likely benefit, and with the European currency negatively-correlated to the US Dollar, traders would flee from the safe-haven "Greenback" and, as a result, bolster the EUR/AUD exchange rate.
KPMG chief economist Brendan Rynne said the move to 1 per cent put pressure on the Morrison government to consider other ways to boost the economy.
A number of AUD forecasters continue to expect the Aussie between 5 and 7 percent weaker at year-end, at rates between US$0.65 and US$0.665.
The New Zealand two-year swap rate was at 1.3345 per cent from 1.3451 late yesterday, while the 10-year swap rate was at 1.7725 per cent from 1.7900 per cent.