Australia’s dollar held its longest losing streak in a month as investors bet the central bank will decide to cut interest rates that are already at a record low.
Swaps markets give better than 70 percent odds the Sydney-based Reserve Bank of Australia will lower the cash rate target on Tuesday to 2 percent from 2.25 percent, according to data compiled by Bloomberg. Twenty-five of 29 economists surveyed by Bloomberg also predicted a quarter-point reduction. Traders will be hoping they get lucky this time after betting on rate cuts at each of the previous two policy meetings.
“Our call is for a cut,” said Robert Rennie, global head of currency and commodity strategy in Sydney at Westpac Banking Corp., adding that such a decision may drive the Aussie down more than 2 percent to 76.50 U.S. cents. “The sense is the RBA will need to further downward revise its growth forecasts for next year.”