Australia’s dollar held its biggest one-day gain in two weeks on bets recent losses were overdone and amid easing risks in the shadow-banking system in China, the South Pacific nation’s biggest trading partner.
The Aussie was up from a 3 1/2-year low reached at the end of last week as technical indicators signaled its drop was excessive, heightening its potential for a rebound. New Zealand’s currency slid versus all of its 16 major counterparts as economists forecast central bank policy makers meeting this week will refrain from raising the nation’s key rate even as traders see a 58 percent chance of an increase, according to interest-rate swaps data compiled by Bloomberg.
“The Aussie is looking pretty oversold,” said Ray Attrill, the global co-head of currency strategy at National Australia Bank Ltd. in Sydney. “Positioning does look quite stretched and the Aussie does look low in relation to short-term fair value estimates.”
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