The currency declined for an eighth day before a government report that economists estimate will show jobs growth slowed, adding to signs a cooling economy will allow the Reserve Bank of Australia to reduce the benchmark interest rate. Governor Glenn Stevens said Aug. 5, after keeping borrowing costs on hold, that the ``scope to move toward a less restrictive stance of monetary policy'' was increasing as demand slowed.
The local dollar traded at 91.03 U.S. cents as of 10:52 a.m. in Sydney from 91.55 cents late in Asia yesterday. It reached 90.65 cents, the weakest since April 2. The currency, known as the Aussie, climbed to 99.56 yen from 99.44.
Australia's dollar fell against 15 of the 16 most-traded currencies as the Reuters/Jeffries CRB Index of 19 commodities and the UBS Constant Maturity Index of 26 raw materials slid for a fifth day yesterday in New York.
Crude oil futures fell as low as $117.11 a barrel, 20 percent below the July 11 record of $147.27 in New York. Crude oil is Australia's fourth most-valuable raw material export. Commodity shipments contribute 17 percent to the nation's economy.
The Aussie has lost 0.9 percent since the RBA kept borrowing costs at a 12-year high of 7.25 percent on Aug. 5 and signaled rate cuts ahead.
The RBA will lower its benchmark rate by 0.83 percentage point over the next 12 months, according to a Credit Suisse Group index based on overnight swaps trading yesterday. The bank will definitely cut rates by 0.25 percentage point at its next meeting in September another Credit Suisse index showed. The RBA usually adjusts the target rate in 0.25 percentage point increments.
A benchmark rate of 7.25 percent in Australia, compared with 0.5 percent in Japan and 2 percent in the U.S., has made the Aussie a favorite with investors seeking higher-yielding assets.