“Australia’s dollar declined against most of its major peers amid speculation the nation’s central bank will lower interest rates next week to shield the economy from a slowdown in mining.
The so-called Aussie was near a three-week low versus its New Zealand counterpart as traders added to bets the Reserve Bank of Australia will reduce interest rates after a report yesterday showed a lower mining investment projection. Australian bonds rose, with the 10-year yield touching the least in 10 days. Demand for the New Zealand dollar was limited after data showed building permits unexpectedly fell.
“It wouldn’t be overly surprising if the RBA cuts rates next week, given yesterday’s capital expenditure data, which was downgraded,” said Peter Dragicevich, a currency economist in Sydney at Commonwealth Bank of Australia. (CBA) “We don’t think an actual cut next week will put too much downward pressure on Aussie — a lot of the cuts are already factored into the market.” ”
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