Australia's currency may weaken for a seventh day, its longest losing stretch in almost two years, as the prices of commodities the country exports such as gold and oil declined.
The Australian dollar traded at 91.89 U.S. cents as of 4:55 p.m. in Sydney from 91.85 cents late in Asia yesterday. It earlier reached 91.33 cents, the lowest since April 4. The currency, known as the Aussie, climbed to 99.63 yen from 99.07 yen yesterday when it slid 1.8 percent, the most since March.
Australia's currency extended its decline in the past week to 2.5 percent, the worst performance among the 16 most-active currencies versus the U.S. dollar, as the difference in yield between local two-year bonds and similar-dated U.S. debt shrank to 3.44 percentage points, the narrowest since Dec. 7.
RBA Governor Glenn Stevens said yesterday that inflation may slow, allowing for a ``less restrictive stance'' on interest rates. The central bank left its benchmark interest rate unchanged at 7.25 percent, which compares with 8 percent in New Zealand, 2 percent in the U.S. and 0.5 percent in Japan.
The Australian dollar also weakened as prices slid for gold and crude oil, the nation's third and fourth most-valuable raw material exports. Gold dropped below $900 an ounce and crude oil fell below $119 a barrel to its lowest in three months. Commodity exports contribute 17 percent to the nation's $1 trillion economy.