Aussie Dollar Falls as Treasury Says RBA Can Cut Rates

Australia’s dollar declined against most of its major peers after the nation’s Treasury said the central bank would be able to ease monetary policy if the currency’s gains are hurting the economy.

The Aussie fell versus the U.S. dollar for the first time in three days and declined for the first week since the five days ended July 6. New Zealand’s currency fell against all its major counterparts today, weakening against the greenback for the first time in three days.

Australia’s dollar fell 0.9 percent to $1.0420 as of 5 p.m. in New York, extending its weekly decline to 1.5 percent. It dropped 0.6 percent to 82.90 yen.

New Zealand’s dollar, nicknamed the kiwi, weakened 0.4 percent to 80.76 U.S. cents, after rising 0.6 percent in the past two days. For the week, it lost 0.7 percent. The kiwi declined 0.1 percent to 64.25 yen.

The Reserve Bank of Australia will release minutes next week of its Aug. 7 policy meeting, at which policy makers left interest rates unchanged at 3.5 percent.

The euro may strengthen against the Australian dollar to the highest level in more than a month if it breaks a key resistance level, according to JPMorgan Chase & Co., citing technical indicators. The shared currency rose 0.7 percent today to A$1.1836 to the Aussie.

The 17-nation currency has held the support level of A$1.1538 in the near term, Niall O’Connor, a New York-based technical analyst at JPMorgan, wrote today in a note to clients. The euro has since appreciated and will test key hurdles at A$1.1860 to A$1.1935, he said, and may rise to A$1.20 to A$1.21 if it breaks through this resistance. It last breached A$1.20 on July 13. Support and resistance refer to areas on a chart where orders may be clustered.

To contact the reporters on this story: Cordell Eddings in New York at Ceddings@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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