The Australian dollar dropped the most in three weeks against its U.S. counterpart before China is forecast to announce its economic growth slowed last quarter.
The Aussie and New Zealand’s dollar fell against the majority of their 16 most-traded peers as signs global growth is slowing damped appetite for higher-yielding assets. Data showed Australian employers cut jobs last month and manufacturing in New Zealand expanded at a slower pace.
The employment report “brings back on the table the potential for a rate cut in August,” Mark McCormick, a currency strategist at Brown Brothers Harriman & Co. in New York, said in a telephone interview. “You have that coupled with Chinese growth. If both of those are negative, they could be pretty strong headwinds against the Australian dollar,”
Australia’s dollar fell as much as 1.5 percent, the biggest intraday drop since June 21, to $1.101 yesterday in New York before trading at $1.0139, down 1.1 percent. The Aussie dropped 0.8 percent to A$1.2036 per euro and tumbled 1.7 percent to 80.41 yen.
New Zealand’s dollar, called the kiwi, weakened 0.9 percent to 78.94 U.S. cents and slid 1.4 percent to 62.62 yen.
China’s economic growth slowed to an annual 7.7 percent last quarter, from 8.1 percent in the previous three months, a Bloomberg survey forecast before the data is released today. China is Australia’s biggest trading partner.
The Reserve Bank of Australia will keep its overnight cash-rate target at 3.5 percent at its Aug. 7 policy meeting, according to the median estimate in a Bloomberg News survey.
The number of people employed in Australia fell by 27,000 in June, the statistics bureau said in Sydney yesterday. That compared with the median estimate of no change in employment in a Bloomberg News survey of economists. The jobless rate rose to 5.2 percent from 5.1 percent.
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