Australia’s dollar halted a decline that started last week before the Federal Reserve begins a two-day meeting tomorrow amid forecasts U.S. policy makers will maintain bond purchases that tend to devalue the greenback.
The Aussie rose versus the yen as futures signaled Asian stocks will gain, boosting demand for higher-yielding assets. Australia’s currency fell last week as the biggest jump in Chinese money-market rates since June’s record cash crunch raised concern the nation’s largest trading partner is slowing.
“The market is looking for further confirmation that tapering is still some time off and if we do get that we’ll get some more U.S. dollar weakness,” said Jim Vrondas, chief currency and payment strategist at OzForex Ltd. in Sydney. “We should see some reversal of the nervousness that we saw toward China and the Aussie dollar last week, and a move back toward the 97-cent mark.”
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