Oct. 17 (Bloomberg) -- The Australian dollar halted gains before the Reserve Bank of Australia tomorrow releases minutes of its Oct. 4 meeting when Governor Glenn Stevens signaled there’s more scope to cut rates if necessary.
The so-called Aussie snapped a three-day advance versus its U.S. counterpart on speculation its recent climb was excessive. The New Zealand dollar slid after a report showed the nation’s services industry slowed in September. Losses in the South Pacific currencies were limited as Asian stocks extended a global rally from last week.
“After such a big move, the Australian dollar getting a few wobbles is certainly understandable,” said Gavin Stacey, chief interest-rate strategist at Barclays Capital in Sydney. “Once you’ve had such a large move, you become more susceptible to downside surprises for any disappointment on RBA or the global policy front.”
Australia’s dollar declined 0.2 percent to $1.0316 at 11:24 a.m. in Sydney from Oct. 14 when it completed a 5.9 percent weekly surge. The currency fell 0.2 percent to 79.71 yen from last week. The New Zealand dollar slid 0.3 percent to 80.31 U.S. cents and lost 0.3 percent to 62.02 yen.
The MSCI Asia Pacific Index of stocks rose 1.1 percent, following a 1.5 percent jump in MSCI’s World Index on Oct. 14.
Stevens said in a statement accompanying the RBA’s decision to leave rates unchanged at 4.75 percent that “an improved inflation outlook would increase the scope for monetary policy to provide some support to demand, should that prove necessary.”
The Australian dollar’s 10-day relative strength index versus its U.S. counterpart, is at 66.4, nearing the 70-level that some traders see as a sign that an asset’s price may reverse direction after rising too rapidly.
An index for New Zealand’s service industry fell to 53.2 in September from a revised 53.8 in August, Bank of New Zealand Ltd. and Business New Zealand, a Wellington-based employer group, said on the Business New Zealand website. A reading above 50 indicates an expansion.
--With assistance from Monami Yui in Tokyo. Editors: Rocky Swift, Benjamin Purvis
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