Australia’s dollar touched a one-month low against its New Zealand counterpart ahead of the Reserve Bank’s policy decision today and after data showed the bigger nation posted a narrower-than-estimated trade surplus.
The Aussie has been the worst performer of the past month among Group-of-10 currencies amid bets the RBA will keep borrowing costs at an all-time low as the government focuses on spending cuts in next week’s budget. The yen held gains versus most peers over the past week. New Zealand’s dollar climbed for a sixth day against the dollar, matching the longest streak in a year, as currency volatility near a seven-year low boosted the appeal of higher-yielding assets.
“It’s not a strong Aussie story to me with some weakness in commodity prices and budget expectations weighing on yields and the outlook for the RBA,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “I don’t think there will be any change in their growth outlook and it’s likely that we will see some very similar language on the Aussie as last month,” he said of today’s RBA decision.