The Australian dollar eased for a fourth straight session on Thursday following weaker-than-expected economic data and as the US dollar climbed on expectations of faster interest rate rises in the world's largest economy. The Australian dollar was down 0.2 percent at $0.8040, drifting away from a 2-1/2 year peak of $0.8136 set last week.
The Aussie has started the year with a bang, soaring about 3 percent in January alone led by blistering commodity prices. But its golden run seems to have ended with the currency on course for its first weekly loss after seven consecutive gains. Thursday's weakness came after domestic data showed building approvals tumbled 20 percent in December against expectations of an 8 percent fall.
The Aussie was already soggy after tepid reading on inflation on Wednesday led investors to push out the likely timing of a hike in interest rates. The market currently implies around a 50-50 chance of a hike from the Reserve Bank of Australia (RBA) by October, and is not fully priced for a move to 1.75 percent until early next year.
Across the Tasman Sea, the New Zealand dollar slipped from a one-week high of $0.7420 to last trade around $0.7360. The kiwi jumped 3.8 percent in January and is on track to clock its eight straight weekly gain. New Zealand government bonds eased, sending yields 1 basis point higher at the long end of the curve.
Australian government bond futures were mixed, with the three-year bond contract up half a tick at 97.810. The 10-year contract eased 2 ticks to 97.165. The US Federal Reserve, on the other hand, is now expected to hike rates two to three times in 2018 as it sees both inflation and economic activity picking up in the year.
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