The Australian dollar held losses that took it to the lowest since September 2010 as traders added to bets that the central bank will cut interest rates.
Swaps data compiled by Bloomberg show traders see a 53 percent chance the Reserve Bank of Australia will lower the rate to 2.5 percent at its next meeting on Aug. 6, compared to a 31 percent likelihood indicated a week ago. The Aussie erased earlier gains after data showed building approvals fell more than economists had estimated.
“The RBA has ramped up the talk about the Aussie being high, really talking it down in a way and acknowledging that possibility that the cash rate could fall further,” said Janu Chan, a Sydney-based economist at St. George Bank Ltd. “With the RBA sentiment and just the general momentum, there’s every chance Aussie’s going to fall further.”
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