Australia’s core inflation slowed last quarter, sending the currency lower as investors eased bets on the likelihood of an interest-rate increase.
Futures traders have turned bullish on the Australian dollar for the first time in 11 months, as the currency climbed as much as 9 percent from a 3 1/2-year low reached in January.
The dollar ended five days of losses against a basket of its major counterparts as investor risk appetite shrank and global stocks dropped.
The Australian dollar slid against all its major peers as a slump in global stock markets damped demand for higher-yielding currencies.
Australia’s unemployment rate unexpectedly fell in March, sending the Aussie to a 4 1/2 month high as traders added to bets on an interest-rate increase.
Japanese households helped drive Australia’s dollar to its best start to a year since 2010 as the Reserve Bank signaled it has finished cutting interest rates.
The Australian dollar is set to retreat from a five-month high versus the greenback, technical indicators suggest, threatening to end its longest weekly winning streak in 20 months.
The Bank of Japan will probably boost currency in circulation by more than 50 percent by the end of 2015, catching up with the Federal Reserve, amid forecasts for extra stimulus.
Reserve Bank of Australia Governor Glenn Stevens said it’s too early to be sure a handover from mining investment to domestic-led growth will occur smoothly.
A year after taxpayer support for Australia’s mortgage bonds ended, lenders want it back as issuance languishes at half the levels seen before the global financial crisis.
"There are some promising early signs that things may turn out not too badly."
- Glenn Stevens on Apr 02, 2014