The expected fluctuation of the Australian dollar rose toward the highest in more than four months as traders weighed prospects for the Reserve Bank to scrap its easing bias while emerging markets drop.
New Zealand’s central bank said it intends to start raising borrowing costs “soon” as the economy strengthens. The currency fell as markets had priced in about a 50 percent chance of a rate increase today.
Australia’s dollar fell for a third day versus the greenback amid speculation U.S. payrolls data tomorrow will encourage the Federal Reserve to continue tapering stimulus that has boosted asset prices around the world.
Australa’s dollar rose versus most of its major peers after Chinese leaders unveiled the biggest economic reforms since the 1990s, buoying the outlook for the South Pacific nation’s exports to the world’s No. 2 economy.
New Zealand’s dollar climbed to its strongest level since February against the Australian dollar on speculation its central bank will raise interest rates at a faster pace than Australian policy makers.
The euro fell to a six-week low versus the dollar before European Central Bank Executive Board member Joerg Asmussen speaks in the run-up to a policy meeting this week amid speculation further stimulus will be needed.
Australia’s dollar touched a 4 1/2- year low versus its New Zealand peer, as the smaller nation’s central bank flagged a need to remove stimulus and drove a divergence in monetary policy prospects for the two countries.