Oct. 28 (Bloomberg) -- The Australian dollar slipped from almost a two-month high against its U.S. counterpart as traders speculated that the South Pacific currency’s biggest advance in more than a year was too rapid.
The Aussie pared its fourth weekly gain versus the greenback, its longest winning streak since April. Demand for Australia’s dollar also ebbed before the nation’s central bank meets Nov. 1 amid bets Governor Glenn Stevens will cut interest rates. The New Zealand dollar retreated from almost a five-week high, trimming a weekly increase.
“In the short term, you will get a bit of a pullback as a standard correction following strong rallies,” said Richard Grace, the Sydney-based chief foreign-exchange strategist and head of international economics at Commonwealth Bank of Australia. “We have a forecast of $1.04 for the Aussie by year- end, and we feel very comfortable with that.”
The Australian dollar depreciated 0.2 percent to $1.0709 at 11:18 a.m. in New York after rising to $1.0753 yesterday, its highest level since Sept. 1, as European leaders reached accord on their sovereign debt crisis. The Aussie’s 3.2 percent gain at closing against the greenback yesterday was the biggest since May 2010. The South Pacific currency weakened 0.4 percent to 81.13 yen after climbing 2.9 percent yesterday.
New Zealand’s dollar, nicknamed the kiwi, weakened 0.2 percent to 82.13 U.S. cents after earlier touching 82.43 cents, the highest level since Sept. 21. The kiwi fell 0.4 percent to 62.23 yen.
The Aussie rose 3.3 percent against its U.S. counterpart this week and the kiwi added 2.2 percent as European Union leaders meeting in Brussels agreed to expand the euro region’s bailout fund and persuaded holders of Greek bonds to accept a 50 percent writedown.
The MSCI World Index gained 0.3 percent today after rallying 4.2 percent yesterday. The Thomson Reuters/Jefferies CRB Index of raw materials dropped 0.3 percent after a 2.6 percent gain.
--With assistance from Candice Zachariahs in Sydney, Ronnie Harui in Singapore and Catarina Saraiva in New York. Editors: Greg Storey, Dave Liedtka
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