The Australian dollar was set for a fifth straight day of decline on Tuesday as markets wagered the economic impact of deadly bushfires ravaging the country could force a rate cut as soon as February while New Zealand's dollar was barely changed.
The Australian dollar <AUD=D4> slipped 0.1% to hover near a 1-1/2 week trough at $0.69305.
Interbank futures <0#YIB:> added to their gains this week, implying a 50-50 chance of an interest rate cut as soon as next month both due to risks to growth globally and threats to the domestic economy from bushfires. [FRX/]
The Reserve Bank of Australia (RBA) cut interest rates three times last year to a record low 0.75% and many economists expect two more easings this year.
In signs of the early impact from the catastrophic fires, a gauge of Australian consumer confidence slumped last week to its lowest level in more than four years. Job advertisements suffered their largest monthly drop in seven months in December.
"In the final two weeks of December, the number of job ads declined by more than we would expect for that time of the year, suggesting that the escalating bushfire crises had an impact," ANZ senior economist Catherine Birch said.
"The current bushfires could see a short-term negative impact on employment."
The worst of the fires also coincided with the height of the Christmas shopping and tourist seasons and could well drag on economic growth in both December and January.
Data out this week include approvals to build new homes on Wednesday, the trade balance on Thursday and retail sales for November on Friday.
The latter are actually expected to show a solid increase for November, but largely because sale events such as Black Friday pulled spending forward from Christmas.
Across the Tasman Sea, the kiwi dollar <NZD=D4> was last at $0.6671, easing from a five-month high of $0.6755 touched on Dec.31. Chart support comes in around $0.6645.
(Editing by Simon Cameron-Moore)
