Reserve Bank of Australia Governor Glenn Stevens, who cut interest rates twice last year to help manufacturers and consumers, is diverging from traders expecting a mining boom to lift the local currency to the most in more than 20 years.
The euro fell to a one-month low against the yen and slumped versus the dollar on concern Italy’s new government will struggle to win enough support to prevent the region’s debt crisis from engulfing the nation.
The Swiss franc rose against all of its 16 most-traded peers, reaching a record against the euro, as investors sought safety on concern an austerity plan to stabilize Greece won’t resolve Europe’s sovereign-debt crisis.
The dollar fell from a three-week high against the euro on speculation the Federal Reserve will signal today it’s moving toward a third round of asset purchases, or quantitative easing, to spur economic growth.
Foreign-exchange traders are putting their faith in Jean-Claude Trichet, betting the European Central Bank President will save the euro from a collapse predicted by everyone from George Soros to Paul Volcker.
The dollar dropped for the first time in four days against a basket of its biggest trading partners as speculation increased European leaders will do what is necessary to stem the region’s sovereign debt crisis.
The dollar fell to its lowest level since November against the currencies of six U.S. trade partners on bets the European Central Bank will be more aggressive than the Federal Reserve about controlling inflation.