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