Australia, N.Z. Dollars Fall After RBA Cites Job Market in Cuts
The Australian and New Zealand dollars fell for a second day versus their U.S. peer after the Reserve Bank of Australia cited a weaker labor market as a reason for its decision this month to cut interest rates.
The Aussie declined after minutes of the RBA’s Dec. 4 meeting showed it said growth is stabilizing in China. Policy makers at the meeting lowered the bank’s overnight cash-rate target to 3 percent, from 3.25 percent. New Zealand’s dollar fell versus all of its most-traded counterparts except the yen after the Treasury Department cut its budget-surplus forecast for 2015.
“Policy makers suggested that their decision to ease was driven by a softened outlook for investment as well as weakened expectations for employment growth,” Eric Theoret, a currency strategist in Toronto at Bank of Nova Scotia’s Scotia Capital unit, wrote yesterday in a note to clients. “The range in Aussie-dollar is likely to remain constrained, given the absence of a catalyst.”
Australia’s currency depreciated 0.2 percent to $1.0535 yesterday in New York. It rose 0.2 percent to 88.71 yen.
The New Zealand dollar, nicknamed the kiwi, sank 0.4 percent to 84.14 U.S. cents after declining as much as 0.6 percent, its biggest intraday drop since Nov. 14. The kiwi was little changed at 70.86 yen.
The Aussie may rise to $1.10 should it break above $1.06, a key resistance level, according to Takuya Kawabata, a researcher in Tokyo at Gaitame.com. Resistance is an area on a chart where sell orders may be clustered.
The Standard & Poor’s GSCI Index of raw materials increased 0.5 percent and crude-oil futures gained 0.8 percent to $87.89 per barrel in New York. The S&P 500 Index (SPX) rose 1.2 percent.
New Zealand’s dollar has strengthened 5.7 percent this year, the biggest increase among the 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes, and the Aussie has gained 0.1 percent. The U.S. dollar has fallen 3.3 percent, and the yen has dropped 13 percent to lead decliners.
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