Australia’s dollar held gains from last week after official data on Chinese manufacturing indicated an expansion and before the South Pacific nation’s Reserve Bank meets.
The so-called Aussie gained against the yen as swaps trades show 96 percent odds the RBA will keep rates on hold at 2.5 percent tomorrow. Local bonds were little changed after the benchmark 10-year yield dropped to a three-month low last week. The central bank also will release its quarterly statement of monetary policy on Feb. 7. The New Zealand dollar rebounded from a four-month low versus the greenback.
“I’m sure as much as one can be that the RBA will not be reducing rates,” said Hans Kunnen, a senior economist at St. George Bank Ltd. in Sydney. “I think the text will confirm the current cycle of easing is over and that could be a positive for the Aussie.”
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