The Australian dollar dropped to a three-month low against the greenback after data showed economic growth was weaker than analysts estimated.
The Aussie slid against all 16 major peers before a private U.S. jobs report as markets weigh the prospects for a tapering of Federal Reserve stimulus over coming months. Australia’s central bank yesterday kept interest rates at a record-low 2.5 percent and the median forecast is for the benchmark to remain unchanged through 2014. New Zealand’s dollar rose to its strongest since 2008 versus the Aussie as the two-year swap rate in the smaller nation reached its highest in two years.
“It’s a disappointing GDP number and we’re currently running significantly below trend, so clearly the Australian economy requires further stimulus,” said Robert Rennie, global head of foreign-exchange and commodity strategy at Westpac Banking Corp. in Sydney. “The Aussie has weakened but we’re beginning to show signs of basing in the low 90s. I think the Aussie remains in the 90 to 95-cent range.”