“Australia’s dollar fell to the lowest in almost three years versus the greenback after home-loan approvals grew at the slowest pace in three months, boosting the case for further cuts to borrowing costs.
Australia’s currency slid for a third day amid speculation the Federal Reserve will reduce stimulus this year, narrowing Australia’s interest-rate advantage. The Aussie and New Zealanddollars dropped against the yen after the Bank of Japan kept monetary policy unchanged, disappointing investors who had expected it to introduce measures to stem market volatility. The kiwi dollar was set for its lowest close in a year.
“Housing is the one area most likely to make up for the mining investment downturn, and it’s disappointed,” said Joseph Capurso, a Sydney-based foreign-exchange strategist atCommonwealth Bank of Australia. “You’ve got to say that the Aussie’s going to keep on falling.”
Australia’s dollar slid 1.1 percent to 93.61 U.S. cents as of 5:18 p.m. in Sydney after touching 93.54, the lowest since September 2010. New Zealand’s currency fell 0.9 percent to 78.34 U.S. cents, set for its weakest close since June 2012. The Aussie dropped 1.6 percent to 92.02 yen, while the kiwi tumbled 1.4 percent to 76.94 yen.
Australian home-loan approvals rose 0.8 percent in April from the month before, the smallest increase since January. Economists surveyed by Bloomberg News forecast a 2 percent rise. March’s gain was revised to 4.8 percent from 5.2 percent.
Reserve Bank of Australia Governor Glenn Stevens and his board reduced the overnight cash-rate target to a record 2.75 percent last month. A benign inflation outlook gave them scope to help industries including construction to rebalance growth away from resource investment….”
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