AUD/USD at 1.0070 Before RBA Updates Forecasts

The Australian dollar was 0.8 percent from falling below parity with its U.S. counterpart for the first time in 10 months, before the central bank updates its economic forecasts after cutting interest rates to a record.

The so-called Aussie dropped versus all 16 major counterparts this week as the Reserve Bank of Australia lowered its benchmark to a record 2.75 percent on May 7 and cited unusual strength in the currency. New Zealand’s dollar halted four days of declines versus the greenback as a report showed card spending rose more than forecast.

“The RBA will continue cutting the cash rate into early next year down to 2 percent, diminishing the interest-rate support for the currency,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC) “If it stays below $1.01, that augurs very poorly for the Aussie and it can fall as far as 99 U.S. cents.”


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