Australia’s dollar fell to the lowest in more than two 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.
The Aussie slid against all but one of its 16 most-traded peers amid speculation the Federal Reserve will reduce stimulus this year, narrowing Australia’s interest-rate advantage. Standard & Poor’s lifted the U.S. credit outlook to stable from negative, supporting the view that the Fed could taper asset purchases under its program of quantitative easing. New Zealand’s kiwi dollar fell.
“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 at Commonwealth Bank of Australia. “You’ve got to say that the Aussie’s going to keep on falling.”
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