Australian government bonds marked a third consecutive trading session of advances on Friday as the Reserve Bank of Australia is forecast to implement a rate cut to spur the economy's growth. China is set to release data on Saturday that is likely to show the nation's development and growth has slowed.
"Volatility has long been the nemesis of the carry trade," states a Friday research note penned by global co-head of foreign-exchange strategy Ray Attrill with Sydney at National Bank of Australia Ltd., according to Bloomberg. "In the absence of a retracement of at least half of the recent spike in volatility, there is no reason to expect interest in the Australian dollar as a carry trade currency to revive."
The Aussie has endured 4.2 percent losses against the Japanese yen during the past five days of trading as it dives toward its biggest drop since September 2011. This week's losses against the U.S. dollar are roughly 0.6 percent.
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