The Australian dollar weakened before the Reserve Bank of Australia releases tomorrow minutes of its meeting on Oct. 4 when Governor Glenn Stevens signaled there’s more scope to cut interest rates if necessary. The so-called Aussie snapped a three-day advance versus its U.S. counterpart on speculation its recent climb was excessive. The New Zealand dollar slid after a report showed the nation’s services industry slowed in September. Losses in the South Pacific nations’ currencies were limited as Asian stocks extended a global rally from last week. “After such a big move, the Australian dollar getting a few wobbles is certainly understandable,” said Gavin Stacey, chief interest-rate strategist at Barclays Capital in Sydney. “Once you’ve had such a large move, you become more susceptible to downside surprises for any disappointment on RBA or the global policy front.” Australia’s dollar declined 0.4 percent to $1.0297 at 2:24 p.m. in Sydney after surging 5.9 percent last week. The currency fell 0.4 percent to 79.51 yen. The New Zealand dollar slid 0.4 percent to 80.19 U.S. cents and also lost 0.4 percent to 61.93 yen. The MSCI Asia Pacific Index of stocks rose 1.7 percent, following a 1.5 percent advance by MSCI’s World Index on Oct. 14. RBA Policy Stevens said in a statement accompanying the RBA’s decision to leave rates unchanged at 4.75 percent that “an improved inflation outlook would increase the scope for monetary policy to provide some support to demand, should that prove necessary.” Traders are betting the RBA will cut its cash target by at least 25 basis points by the end of this year, cash rate futures show. “The market has seen interest rate expectation for an easing near term being scaled back somewhat,” Barclay’s Stacey said. Investors may be “a little bit wary that the RBA minutes would provide further clarification on why the RBA shifted a little bit to the dovish side,” he said. The Australian dollar’s 10-day relative strength index versus its U.S. counterpart was at 68.36 on Oct. 14, near the 70-level that some traders see as a sign that an asset’s price may reverse direction after rising too rapidly. Sales of new autos in Australia dropped 1.5 percent in September from the previous month when they rose a revised 3.4 percent, the government statistics agency said today in Sydney. An index for New Zealand’s service industry fell to 53.2 in September from a revised 53.8 in August, Bank of New Zealand Ltd. and Business New Zealand, a Wellington-based employer group, said on the Business New Zealand website. A reading above 50 indicates an expansion. G-20 Meeting Losses in the South Pacific currencies were limited as Asian stocks rose after Group of 20 finance chiefs and central bankers, who met over the weekend in Paris, endorsed parts of an emerging plan to contain Europe’s debt crisis. Policy makers held out the possibility of handing more International Monetary Fund aid to Europe, while splitting over whether the lender should be given more resources. If European leaders step up efforts to tackle their debt crisis, the U.S. would be willing to back more IMF cash to “supplement” them, U.S. Treasury Secretary Timothy F. Geithner said after the G-20 meeting. “You will see this positive sentiment until we get the details of the European rescue package, so that’s likely to last for couple of days at least,” said Emma Lawson, a currency strategist at National Australia Ltd. in Sydney. She said the Australian dollar may rise to as high as $1.0450 and the New Zealand dollar could reach 81.50 U.S. cents, without specifying any timeframe. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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