Australia’s dollar gained against most of its major peers amid speculation the Reserve Bank may not cut interest rates further after Governor Glenn Stevens said there are signs that loose policy is supporting spending.
The Aussie snapped a two-day decline versus the U.S. dollar as the Federal Reserve weighs whether to reduce the pace of its bond-buying program, which has buoyed asset prices around the world. Three-year Australian government bond yields touched the lowest since Oct. 1. New Zealand’s dollar dropped against all its 16 major counterparts.
“Stevens is basically saying interest rates are not prohibitive for growth, so I think the impact of further monetary policy is limited,” said Annette Beacher, head of Asia-Pacific research at TD Securities Inc. in Singapore. “The currency has moved a lot in the last week, and the impetus for it to go lower isn’t there yet.”