Monday, August 18, 2008

Australian Dollar Declines Before Reserve Bank Board Minutes

By Chris Young

Aug. 19 (Bloomberg) -- The Australian dollar fell on speculation minutes of the central bank's last meeting released today will underpin bets policy makers plan to cut interest rates next month for the first time in more than six years.

The currency approached a more than six-month low set last week as some traders speculated the Reserve Bank of Australia will reduce the benchmark borrowing cost of 7.25 percent by more than a quarter-percentage point, according to a Credit Suisse Group index based on interest-rate swaps.

``The morning's RBA board minutes from the Aug. 5 meeting provides a downside risk for the Australian dollar,'' John Kyriakopoulos, a currency strategist at National Australia Bank Ltd. in Sydney, wrote in a research note. ``The minutes will detail why the RBA believes it needs to cut rates.''

The Australian dollar weakened to 86.71 U.S. cents as of 8:41 a.m. in Sydney, compared with 87.28 cents in late Asian trading yesterday. It touched 85.93 cents last week, the lowest since Jan. 23.

The Reserve Bank will release the minutes of its August meeting at 11:30 a.m. in Sydney. The central bank meets Sept. 2 to decide on interest rates.

Losses in the Australian dollar were limited as prices rose for commodities the nation exports. The Reuters-Jefferies CRB Index of 19 commodities gained for the first time in three days as the price of gold rebounded 1.7 percent.

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