“Australia’s dollar rebounded from its biggest decline in a week on speculation that a wider-than- expected trade deficit reported today won’t be enough to prompt the Reserve Bank to cutinterest rates.
The so-called Aussie rose against most major peers as traders stuck with bets that policy makers will keep the benchmark interest rate unchanged at a meeting next month. New Zealand’s currency, known as the kiwi, slid for a second day versus the greenback after gauges of Asian stocks and raw materials declined.
“The RBA has taken the view that the easing they’ve done so far has yet to work its way into the economy,” said Gareth Berry, a currency strategist at UBS AG in Singapore. “If they do cut at all this year, it’s not going to be immediate. Some bearishness on the Aussie is justified, but overbearishness is not.”
The Australian dollar added 0.2 percent to $1.0248 as of 4:45 p.m. in Sydney from yesterday when it dropped 0.2 percent, the most since Feb. 26. It was little changed at 96.25 yen.
The New Zealand dollar dipped 0.1 percent to 82.80 U.S. cents from 82.84. It weakened 0.2 percent to 77.76 yen.
Interest-rate swaps data compiled by Bloomberg show traders see a 77 percent chance theReserve Bank of Australia will keep the overnight cash rate target at 3 percent when policy makers next meet on April 2. UBS predicts no interest rate cuts for the rest of this year.
