Australia’s dollar remained weaker as options showed traders are the most bearish in almost two months after central bankers reiterated they are concerned the currency is overvalued.
Reserve Bank of Australia Deputy Governor Philip Lowe said yesterday he expects to see further adjustment in the currency, echoing comments from Governor Glenn Stevens last week. The Aussie maintained a five-day slide against the greenback. It touched an almost three-month low yesterday, when it also sank to the weakest since 2008 versus New Zealand’s kiwi dollar.
“It’s clear the RBA doesn’t want Aussie much higher,” said Stan Shamu, a Melbourne-based market strategist at IG Ltd. “The strategy that seems to be most prominent amongst traders is selling Aussie into strength. If we close below yesterday’s low, we’ll be looking at 90 U.S. cents in the short term.”
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