Australia’s dollar bought 82 U.S. cents in December when Reserve Bank Governor Glenn Stevens said he’d prefer it at 75 cents. Less than eight weeks later he is close to reaching that goal.
The Aussie dropped as much as 2 percent to 76.51 and traded at 76.60 as of 4:17 p.m. Tuesday in Sydney, after the central bank cut its benchmark interest rate to a record 2.25 percent, joining at least 12 monetary authorities that have eased policy this year. “A weaker currency will probably be needed to achieve balanced growth in the economy,” Stevens said in a statement.
“Australia’s had to put up with such a strong currency for such a long time and now everyone’s weakening currencies,” Kit Juckes, a London-based strategist at Societe Generale SA, said before the announcement in an interview in Singapore. “Reaffirmation that ‘Yup, please feel free to see it fall toward 70 cents’, that would be embraced.”