Australia’s dollar approached the lowest in nearly three years against the greenback before the Reserve Bank decides on policy today.
The Aussie declined against all its major counterparts, as traders and economists predicted a record low for the benchmark interest rate. New Zealand’s dollar gained against its peers after the trade minister said Chinese restrictions on dairy products from Auckland-based Fonterra Cooperative Group Ltd. were less severe than the South Pacific nation’s government initially reported.
An RBA rate reduction today “almost looks like a done deal, so it’s all about forward guidance, and the urgency they have in delivering another cut,” said Stan Shamu, a Melbourne-based market strategist at IG Markets. “If they do cut and come out with a wait-and-see approach, then that might be a little less dovish than the market expected, and could lead to a squeeze higher for the Aussie dollar.”
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