Aussie Below 80 Cents as Canada, ECB Feed RBA Rate-Cut Bets

The Aussie dollar’s slide below 80 U.S. cents for the first time since 2009 is being fueled by speculation the central bank will need to cut borrowing costs to a new record low.

The Bank of Canada’s surprise decision to lower interest rates and the European Central Bank’s bond-purchase program have raised the odds of looser monetary policy in Australia. Traders see a 47 percent chance the Reserve Bank of Australia will lower rates at this year’s first policy meeting on Feb. 3, up from 25 percent odds on Jan. 16, according to overnight interest-rate swaps. Currency traders turned the most bearish on the Aussie in more than a year, options show.