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AUS/USD Falls Below 1.03 Amid Risk Aversion

Australia’s dollar fell to a three- month low versus its U.S. peer as appetite for higher-yielding assets shrank after European Central Bank President Mario Draghi said the euro’s strength may hamper economic recovery.

The currency weakened earlier after employment data failed to signal enough improvement to would rule out further easing by the Reserve Bank of Australia. The RBA will issue a statement today that may reinforce comments it made this week that the inflation outlook “would afford scope to ease policy further.” New Zealand’s dollar slid as commodities fell.

“I would expect to see a reiteration of the dovish bias, and an elaboration of the dovish bias, that we saw earlier this week,” Nick Bennenbroek, the head currency strategist at Wells Fargo & Co, said yesterday in a phone interview from New York.

Bloomberg [1]

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