The Australian dollar traded near the weakest level in almost a month before a Reserve Bank policy decision today.
Australia’s three-year government bond yield, among the most sensitive to interest-rate expectations, was near the lowest since September as economists predict the central bank will keep borrowing costs at a record low following data last week that showed business investment fell more than expected. Demand for the Aussie and its New Zealand counterpart was also limited as continuing tension over Ukraine curbed demand for higher-yielding assets.
“If the RBA inserts some downbeat views on business investment following last week’s capital expenditure data, that might catch a few people off guard, so you might see some selling in the Aussie,” said Joseph Capurso, a Sydney-based currency strategist at Commonwealth Bank of Australia. “If we do get continuing escalation in the confrontation, you’d have to say Aussie would go down rather than up in response,” Capurso said in reference to the standoff in the Crimea region.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at firstname.lastname@example.org. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.