Aussie Set for Biggest Drop This Year on RBA Easing Bets

The RBA cut its key rate by 50 basis points, or 0.5 percentage point, to 3.75 percent on May 1. Governor Glenn Stevens cited economic conditions that “have been somewhat weaker than expected” after the RBA decision, which most economists surveyed by Bloomberg News predicted would be a quarter-percentage-point reduction in borrowing costs.

Interest-rate swaps data compiled by Bloomberg show investors are betting that the RBA will lower its benchmark rate to 3 percent by November, matching 2009’s all-time low. There’s more than a 35 percent chance of the rate declining to 2.75 percent or lower, the data indicate.

The RBA sees average growth of 3 percent in 2012, down from a February estimate of 3.5 percent, according to its quarterly monetary policy statement released today. Consumer prices will rise 2.5 percent in the year to December, from a previous prediction of 3 percent. Underlying inflation is predicted to be at 2.25 percent from a previous 2.75 percent, the central bank said. The estimates are based on the overnight cash rate target remaining at 3.75 percent, it said.

The Australian dollar’s relative strength index versus the greenback was at 41 from 56 on April 27, nearing the 30 level that some traders see as a sign the currency may be about to reverse direction.

Both the Australian and New Zealand currencies fell yesterday after data showed growth slowed in U.S. services industries, curbing demand for risk assets.

Source | Forex News Paper | http://forexnewspaper.blogspot.com/2012/05/aussie-set-for-biggest-drop-this-year.html

Aussie recoups losses against most majors, Friday, September 26, 2008 12:37:35 PM

The Australian dollar strengthened against most of its major counterparts from previous session`s downtrend in New York morning deals on Friday.

After touching a 1-week low of 0.8243 against the US dollar and 0.8545 versus the Canadian dollar at about 3:55 am ET, the Aussie gained ground in New York morning session on Friday. As of now, the Australian currency is trading at 0.8317 against the greenback and 0.8608 versus the loonie.

The U.S. Commerce Department revealed that Gross Domestic Product grew at a rate of 2.8 percent in the April-to-June period. This was slower than the 3.3 percent pace that was reported last month.

The statistics also showed that personal spending advanced at a 1.2 percent rate during the quarter, revised down from the 1.7 percent that was previously estimated.

The Aussie ticked up to 1.7539 against the euro and 88.45 versus the yen by about 10:00 am ET from last session`s weekly lows of 1.7686 and 86.89, respectively. At present, the Aussie is worth 1.7577 against the euro and 88.26 versus the yen.

Source | Forex News | http://forexfx-news.blogspot.com/2008/09/aussie-recoups-losses-against-most.html