Aussie Dollar Hits Two-Month Low as Traders Brace for China DataBy
Currency may drop toward 200-day moving average, Haddad says
Greenback gauge completes longest gain in more than 6 weeks
Australia’s dollar touched a two-month low against the greenback before China releases inflation data that could add to concerns about the outlook for the world’s second-largest economy.
The Aussie fell for a third day after commodity prices plunged on Monday and a report over the weekend showed imports declined for an 18th month in China, Australia’s biggest trading partner. The currency slid more than 3 percent last week, its steepest loss in four months, after the Reserve Bank of Australia cut its benchmark cash rate to a record.
“The Australian dollar is vulnerable to more downside towards its 200-day moving average” at 72.61 U.S. cents, said Elias Haddad, a currency strategist at Commonwealth Bank of Australia in Sydney. A lower-than-expected consumer price index for China would open the door to further rate cuts in the nation and weigh on the Aussie, Haddad said.
Australia’s currency dropped 0.2 percent to 73.04 cents as of 9:19 a.m. in Tokyo on Tuesday, after touching 73, the lowest since March 3. The Aussie will be driven by external economic developments and the direction of the U.S. dollar, Haddad said.
The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, was little changed after climbing for the past five days, the longest advance in more than six weeks. The dollar was at 108.43 yen from 108.32.
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