Underwhelming economic data about the housing market pulled down the Australian dollar on Tuesday against the world's reserve currency as the Aussie dropped near its three-year low against the dollar, Bloomberg reports.
Home-loan approvals in Australia developed at their slowest rate in three months, dropping the Aussie for a third consecutive trade session on Tuesday. Those losses also were prompted by speculation about the central bank of the U.S. slowing down its economy-spurring measures. In the aftermath of the Bank of Japan deciding not to continue is measures for monetary stimulus, the Aussie and the New Zealand dollar lost value against the Japanese yen.
"Our high interest rates relative to the U.S. have kept the Aussie higher, as has our stronger economic growth, but as U.S. growth picks up, that has started to come away," chief economist Hans Kunnen with St. George Bank Ltd. in Sydney told Bloomberg on Tuesday. "If they're going to turn off the taps in the U.S., the dollar rises and the Aussie weakens."
From March to April, approvals for home loans rose 0.8 percent. That marks the smallest increase since January.
Economists surveyed by Dow Jones Newswires forecast the increase to rise as high as 2 percent but, since it did not, concerns are mounting about Australia's housing market.
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