Euro climbs from lowest in three weeks amid optimism on Europe

‘Net Shorts’

The difference in the number of wagers by hedge funds and other large speculators on a decline in the U.S. Dollar Index compared with those on a gain -- so-called net shorts -- was 3,970 on Sept. 25 compared with a net long position of 4,896 a week earlier, according to figures from the Washington-based Commodity Futures Trading Commission.

Australia’s dollar touched the lowest level in more than a year against its New Zealand counterpart before the larger nation’s Reserve Bank holds a policy meeting tomorrow.

Interest-rate swaps data compiled by Bloomberg show traders see an 87 percent chance that RBA policy makers will lower the overnight cash-rate target by 25 basis points from 3.5 percent. That contrasts with the median forecast of economists in a Bloomberg survey that predicts officials will keep the benchmark unchanged for a fourth-straight meeting.

“The bottom line is that a dovish bias will most likely emerge from the RBA, if not in the form of an actual interest rate cut, most probably through a dovish statement,” Audrey Childe-Freeman, head foreign-exchange strategist at Bank of Montreal in London. “All this points at potential near-term downside risk for the Australian dollar.”

The so-called Aussie dollar touched NZ$1.2469, the lowest since September 2011, before trading 0.1 percent lower at NZ$1.2490.

Bloomberg News

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