Australia’s dollar weakened before a report forecast to show retail sales slowed in March and as traders bet on the possibility of the Reserve Bank cutting rates to a record low.
The currency declined toward its lowest level since October 2009 versus New Zealand’s dollar amid prospects monetary policy will diverge in the two nations over the coming year. Both South Pacific nations’ currencies rose last week after a U.S. report showed employment picked up more than forecast in April and the jobless rate unexpectedly declined to a four-year low, spurring demand for higher-yielding assets.
“The softness that we’ve seen in the Aussie is likely to continue,” said Hans Kunnen, chief economist in Sydney at St. George Bank Ltd. “Sentiment is for weak retail sales and the possibility of a cut.”
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