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Aussie Dollar Drops to Three-Week Low After Unexpected Rate Cut

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Oct. 3 (Bloomberg) -- The Australian dollar slid to a three-week low against its U.S. counterpart after the Reserve Bank of Australia unexpectedly lowered its benchmark interest rate to the least since 2009.

The Aussie fell versus all of its 16 most-traded peers after RBA Governor Glenn Stevens and his board cut Australia’s overnight cash-rate target by a quarter-percentage point to 3.25 percent. New Zealand’s dollar touched almost a six-month high versus the greenback after a report showed commodity export prices advanced last month. It erased gains later.

Australia’s dollar weakened 0.9 percent to $1.0267 and touched $1.0252, the lowest level since Sept. 6, yesterday in New York. It depreciated 0.7 percent to 80.24 yen and touched 80.06 yen, also the weakest level since Sept. 6.

The New Zealand dollar, nicknamed the kiwi, ended the day little changed at 82.75 U.S. cents after reaching 83.37 cents earlier. It touched 83.57 cents on Sept. 28, the highest level since March 2. The currency rose 0.2 percent to 64.68 yen.

The kiwi was buoyed by a gain in ANZ National Bank Ltd.’s commodity world price index, which advanced 3.5 percent to 263 in September, its highest level since April.

New Zealand’s dollar has strengthened 4.6 percent this year, the biggest increase among the 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes. The Aussie has fallen 1.9 percent, and the greenback is down 2.5 percent.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

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

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