TOKYO: Australia’s dollar slipped to a five-month low after minutes from the central bank’s latest policy meeting showed it is likely to lower interest rates again.
AUD/USD fell for a fifth day, losing as much as 0.3% to 0.6833.
"Members agreed that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead,” according to minutes of the Reserve Bank of Australia’s June 4 meeting, when it cut rates for the first time in almost three years.
Aussie was sold by macro and fast-money funds after the minutes, according to an Asia-based FX trader. The yen advanced, benefiting from purchases against the Aussie
"Today’s explicit recognition by the RBA that rates will have to move lower is a clear easing bias that hasn’t really come up until this point,” said Kyle Rodda, analyst at IG Markets Ltd. in Melbourne. “The Aussie will probably hit low 68 U.S. cents”.
Macro funds shorted the Aussie against the euro and the yen, according to Asia-based FX traders. Clients see RBA as more prone to act on policy currently than other central banks, one trader said.
AUD/JPY dropped 0.5% to 74.042; AUD/EUR fell 0.4% to 0.6086; USD/JPY fell 0.2% to 108.28.
Selling of AUD/JPY has led to broad strength in the yen against other currencies and a decline in USD/JPY, said David Lu, director at NBC Financial Markets Asia Ltd. in Hong Kong.
Most other Group-of-10 currencies traded in narrow ranges as investors awaited the outcomes of four central bank meetings this week, including the Federal Reserve on Wednesday and the Bank of England, Norges Bank and Bank of Japan on Thursday.
The Bloomberg Dollar Spot Index declined for the first time in three days, slipping 0.1%; 10-year Treasury yield fell 2bps to 2.08%. - Bloomberg