Dec. 1 (Bloomberg) -- Australia’s dollar fell from almost a two-week high versus its U.S. counterpart after government reports showed consumer spending slowed and building approvals dropped, strengthening the case for interest-rate cuts by the central bank.
The Aussie declined versus all of its 16 most-traded peers and New Zealand’s currency snapped a three-day gain against the greenback as an index of Chinese manufacturing indicated a contraction for the first time since February 2009. China is Australia’s largest trading partner and New Zealand’s second- biggest export destination.
“Housing and the consumer are still a very big part of the Australian economy, so this is not a great result and adds to the case that there should be further monetary policy easing,” said Jonathan Cavenagh, a currency strategist in Singapore at Westpac Banking Corp., Australia’s second-largest lender. “The data has given the Aussie a kick lower, and it should trend down a little from here.”
Australia’s dollar fell 0.7 percent to $1.0213 at 12:21 p.m. in New York. It touched $1.0328 yesterday, the strongest since Nov. 14. The Aussie depreciated 0.6 percent to 79.32 yen. New Zealand’s dollar weakened 0.5 percent to 77.68 U.S. cents and declined 0.4 percent to 60.32 yen.
The number of permits granted to build or renovate houses and apartments in Australia fell 10.7 percent in October from the previous month, when they dropped a revised 14.2 percent, the Bureau of Statistics said today. None of the 20 economists surveyed by Bloomberg News predicted a decline.
A purchasing managers’ index compiled by the China Federation of Logistics and Purchasing fell to 49 in November from 50.4 in October. The median estimate in a Bloomberg survey of 18 economists was 49.8. A level above 50 indicates expansion.
The Reserve Bank of Australia cut its benchmark interest rate on Oct. 31 to 4.5 percent from 4.75 percent. It meets next week.
--With assistance from Catarina Saraiva in New York. Editors: Greg Storey,
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