Australia’s dollar dropped to the lowest in more than five years against its New Zealand peer after the nation’s central bank said it maintained the option of loosening policy monetary policy further.
The Aussie traded within one cent of the three-year low of 88.48 U.S. cents reached in August, before Reserve Bank of Australia Governor Glenn Stevens testifies to the House of Representatives Economic Committee tomorrow. Stevens last week marked out 85 cents as a level he’d prefer. New Zealand’s dollar rose against all of its 16 major peers after the government projected a bigger budget surplus.
“There’s a big contrast between Australia and New Zealand at the moment. The RBA minutes and New Zealand budget update reinforced that,” said Jonathan Cavenagh, a Singapore-based foreign-exchange strategist at Westpac Banking Corp. “We’re probably going to trend towards the NZ$1.05-NZ$1.06 region” in two to three months, Cavenagh said.
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