Australian Dollar Falls on Rate-Cut Signal

The Australian dollar fell to a three- month low after Reserve Bank of Australia Governor Glenn Stevens said inflation may slow, allowing for a ``less restrictive stance'' on interest rates. The New Zealand dollar also declined.

Australia's currency dropped for a sixth day as the RBA left borrowing costs on hold at 7.25 percent, with futures contracts showing policy makers will reduce rates this year as the economy cools. Australia's dollar also weakened as prices slid for commodity exports. New Zealand's currency extended the last week's loss to 2 percent after Reserve Bank of New Zealand Governor Alan Bollard said he has scope to lower rates further.

The Australian dollar dropped to 92.09 U.S. cents, the lowest since April 14, before trading at 92.21 cents at 5:38 p.m. in Sydney from 92.79 cents before the RBA's decision and 93.37 cents late in Asia yesterday.

Australian Dollar Falls on Rate-Cut Signal, Bloomberg
8/5/2008 6:27:50 AM