Australia’s
dollar held its longest losing streak in a month as investors bet the
central bank will decide to cut interest rates that are already at a
record low.
Swaps
markets give better than 70 percent odds the Sydney-based Reserve Bank
of Australia will lower the cash rate target on Tuesday to 2 percent
from 2.25 percent, according to Bloomberg data. Twenty-five of 29
economists surveyed by Bloomberg also predicted a quarter-point
reduction. Traders will be hoping they are third time lucky after
incorrectly wagering on rate cuts at each of the previous two policy
meetings.
Australia’s
currency was little changed at 78.43 U.S. cents as of 10:10 a.m. in
Sydney, following a four-day losing streak that saw it tumble 2.3
percent. It rose as high as 80.76 cents on April 29, a level unseen
since Jan. 22.
The
greenback traded at 120.12 yen from 120.13 in New York. It was
unchanged at $1.1146 per euro. Japanese markets are closed through
Wednesday for public holidays.
Pressure
has built for more RBA stimulus amid weaker prices for iron ore, the
country’s biggest export earner. The steelmaking ingredient is down
about 60 percent from last year’s high, even after a 19 percent climb
from its low on April 2.
The
RBA board will see updated quarterly forecasts at Tuesday’s policy
meeting, before the central bank publishes those estimates on May 8. In
February, when Governor Glenn Stevens cut the cash rate for the first
time in 18 months, he cited the downgrade in growth forecasts in that
month’s Statement on Monetary Policy.
Source : Bloomberg
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