SYDNEY, Sept 29 (Reuters) - The Australian dollar bounced on Tuesday as economists pushed back expectations for a rate cut by the country’s central bank to November from next week while a risk rally across a range of asset markets also helped.
The Australian dollar, a liquid proxy for risk, was last up 0.2% at $0.7083. It rose 0.6% overnight from a two-month low of $0.7008 led by a rebound in U.S. stocks.
Also boosting the Aussie, economists at Westpac on Monday revised their rate forecast for the Reserve Bank of Australia (RBA), saying policy easing measures are now likely in November.
The move prompted other analysts to follow suit.
“Media reports downplaying an October RBA move are just too hard to ignore,” said Prashant Newnaha, Singapore-based Asia-Pacific rates strategist for TD Securities.
“In our view the main benefit the RBA would obtain from waiting till (November) would be clarity on Federal and State budgets to help it calibrate its QE program.”
The Federal budget is due on Oct. 6, only hours after the RBA’s monthly board meeting, where the government is widely expected to announce massive stimulus measures.
Across the Tasman Sea, the New Zealand dollar was up 0.2% at $0.6568, not far from a recent one-month low of $0.6512.
The kiwi has been in a downtrend since late September amid expectations of negative interest rates in the country to help support the export-reliant economy.
Across financial markets, investor attention looks to be turning to the first U.S. presidential election debate where Democrat Joe Biden and Republican Donald Trump will square off later in the day (Wednesday 0100 GMT).
New Zealand government bonds were barely changed.
Australian government bond futures were little moved too, with the three-year bond contract down 1 tick at 99.79. The 10-year contract was off half a tick at 99.165. (Editing by Shri Navaratnam)
Our Standards: The Thomson Reuters Trust Principles.