Australia’s dollar headed for its biggest weekly gain since 2011 before data today that will probably add to signs of stabilization in China, the South Pacific nation’s largest trading partner.
The currency rose for the past four days as the Reserve Bank damped expectations for further easing after cutting its key interest rate to a record low this week. In its Statement on Monetary Policy today, the central bank reduced its outlook for growth. New Zealand’s dollar was set for a weekly climb.
“The market has been very, very short Aussie dollar, and the Aussie has certainly become more and more prone to a correction,” said Derek Mumford, a director at Rochford Capital, a currency risk-management company in Sydney. “Any sort of good news out of China has produced profit taking, and I wouldn’t be surprised to see the Aussie dollar up to 92, 92 1/2 U.S. cents over the next few days.”
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