The Australian dollar fell, heading for the first weekly loss since September, after the Reserve Bank of Australia lowered forecasts for economic growth and inflation, spurring speculation it will cut interest rates again. The so-called Aussie halted a two-day gain after the RBA said risks to its economic forecasts “continue to be tilted to the downside.” Australia’s dollar may drop to parity with the U.S. currency after sliding below its 50-day moving average and a Fibonacci retracement level yesterday, Forecast Pte said. The revisions are “bearish, but the reaction is relatively muted, given the market had already expected that would happen after the rate cut earlier this week,” said Thomas Harr, head of Asian currency strategy at Standard Chartered in Singapore. “The RBA has clearly shifted to an easing bias.” Australia’s dollar declined 0.3 percent $1.0382 as of 3:14 p.m. in Sydney from yesterday, when it rose 0.7 percent. The so- called Aussie is set for a 3 percent weekly loss, the biggest since the five days ended Sept. 23. The currency slid 0.5 percent to 80.95 yen today. New Zealand’s dollar weakened 0.3 percent to 79.34 U.S. cents from yesterday, when it gained 0.5 percent. It’s poised for a 3.4 percent five-day loss, the most since the week ended Sept. 23. The so-called kiwi dropped 0.3 percent to 61.93 yen. RBA Projections The RBA said it sees economic growth of 4 percent in the 12 months to June 30, 2012, down from its Aug. 5 estimate of 4.5 percent. Consumer prices will rise 2 percent over the period, from a previous prediction of 2.5 percent. The central bank lowered the developed world’s highest rates by a quarter-percentage point to 4.5 percent on Nov. 1. Futures traders see a 92 percent chance the RBA will cut an additional 25 basis points in December. Demand for the Australian and New Zealand dollars also weakened on Europe’s worsening debt crisis. Greek Prime Minister George Papandreou scrapped a referendum on an accord with the European Union after it split his party, roiled markets and drew warnings from euro leaders it may cost Greece its membership in the 17-nation currency area. The premier has struck a deal to step down after a confidence vote tonight and hand power to a negotiated government, Reuters reported yesterday. “Both the Aussie and kiwi will continue to be buffeted by ongoing developments coming out of Europe,” said Khoon Goh, head of market economics and strategy ANZ National Bank Ltd. in Wellington. “There’s a rumor circulating that the Prime Minister is going to step down and that’s introducing more uncertainty into the markets. This makes it very difficult in the current environment to really have a firm view on the next directional move for the currencies.” Average, Fibonacci The Aussie dollar slid yesterday below $1.0238, its 50-day moving average and $1.0232, the 38.2 percent retracement of its rally from a low of 93.88 U.S. cents on Oct. 4 to a high of $1.0753 on Oct. 27, data compiled by Bloomberg showed. “The drop has been quite impulsive,” Pak Lai Ng, a technical analyst in Singapore at Forecast, said yesterday. “Maybe it will take one week or two weeks at the most to fall toward the 50 percent level and then to parity.” Australia’s 10-year government bonds fell for the first time this week, pushing yields up eight basis points to 4.3 percent. New Zealand’s two-year swap rate fell 1.5 basis points to 3.095 percent. A basis point is 0.01 percentage point. To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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