Australia’s dollar fell to the lowest this year after retail sales unexpectedly dropped for a third month, adding to prospects the Reserve Bank will cut interest rates next month.
The so-called Aussie slid against eight of the Group of 10 developed currencies yesterday after the central bank said the inflation outlook “would afford scope to ease policy further,” and left the cash rate at a half-century low. New Zealand’s dollar touched the strongest since July 2010 versus its Australian peer after Auckland-based Fonterra Cooperative Group Ltd., said whole-milk powder prices rose and before a report that may show the smaller nation’s jobless rate fell.
“Retail numbers came in on the weak side,” said Callum Henderson, the Singapore-based global head of currency research at Standard Chartered Plc. “While the RBA is on hold, that set of data is likely to add to expectations for further easing later this year.”
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