The
Australian dollar’s climb over the past month has defied forecasts,
taking it to the top of the leaderboard as rising commodity prices,
falling volatility and a central bank on the sidelines drive demand.
Only
one of more than 50 forecasters are predicting the Aussie will
strengthen in the second quarter after it climbed against all major
peers since early February to reach a seven-month high on Friday. The
currency retreated Monday after China’s expanded deficit target
disappointed some in the market expecting a more aggressive stimulus
signal from Australia’s largest trading partner, National Australia Bank
Ltd. said. Traders will watch for comments from Reserve Bank of
Australia Deputy Governor Philip Lowe Tuesday for signs the currency’s
strength is beginning to trouble policy makers.
The
Aussie was at 74.09 cents as of 9:15 a.m. in Tokyo, down 0.4 percent
from Friday, when it touched 74.43, the most since July. It has gained
4.8 percent in the past month. The currency will weaken to 69 cents by
June 30, according to the median of estimates compiled by Bloomberg.
RBA
board member John Edwards last month told the Wall Street Journal that
the Aussie was too strong and he would be more comfortable with a level
around 65 cents. He added that he wasn’t confident a drop to that level
would occur, according to the report.
Source: Bloomberg
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