The Australian dollar’s world- beating rally in the past three months and bets it will extend those gains are fueling speculation policy makers will try to talk down the currency.
The Australian dollar rose, erasing early losses, after Reserve Bank Governor said interest-rate increases were needed.
Australia’s dollar extended declines against the U.S. currency after central bank Governor Glenn Stevens said policy makers are focused on ensuring the nation’s economic rebound is durable.
Australian home-building approvals fell in August by the most in three months and credit growth stalled, giving central bank Governor Glenn Stevens scope to delay a resumption in interest-rate increases.
The dollar held losses versus most major peers as investors weigh whether U.S. economic data this week will be strong enough to assuage central bank concerns the economy still needs stimulus.
Australian bank lending rose in May for a sixth month and house prices gained, a sign the nation’s housing market is weathering higher central bank interest rates.
Australia’s dollar fell ahead of Dec. 18 testimony from its central bank chief and a decision by the U.S. Federal Reserve on trimming stimulus.