“Australia’s dollar declined against most of its major peers after the nation’s Reserve Bank said it increased sales of the currency last month to a category of buyers that includes foreign central banks.
Demand for the so-called Aussie was limited after an Israeli air strike on the Gaza strip and signs of a global slowdown reduced demand for riskier assets. Australian bonds rose, sending the benchmark 10-year yield to the lowest level in almost one month. The Australian and New Zealand dollars rallied versus the yen after Japan’s opposition leader Shinzo Abe called for unlimited central bank easing until deflation is defeated in the world’s third-largest economy.
“There will likely be more chatter that the RBA is perhaps conducting off-market, central bank-to-central bank transactions,” said Emma Lawson, a Sydney-based foreign- exchange strategist at National Australia Bank Ltd. “The Aussie is considered to have been strong due to these market transactions for investors buying our government debt. If it’s being conducted off-market, then perhaps that takes some pressure off the upside for the currency.” ”
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