Australia’s dollar reached a more than three-month low as traders increased bets on how much the nation’s central bank will cut benchmark rates, damping demand for the nation’s assets.
The so-called Aussie weakened after the Reserve Bank of Australia lowered on Feb. 8 its forecasts for inflation and growth, citing a soft labor market and high currency. It remained lower after dropping yesterday against New Zealand’s dollar as a report in the smaller economy showed spending on electronic cards rose in January.
“The RBA has trimmed inflation and growth forecasts so that puts us in line for at least one or two more rate cuts in the next few months,” said David Greene, a senior corporate currency dealer at Western Union Business Solutions, a global payment services network. “Domestic weakness and lack of flow from a fairly worried offshore market are keeping the Aussie weak.”
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