The Australian dollar has dropped to a four-month low after a sharp drop in March building approvals data was worse than punters had predicted.
The building of new houses was down 15.5 per cent, weighed down by a decline in approvals of units and townhouses.
Economists had predicted a fall of 12 per cent after a steep increase in February, but the 30.6 per cent decrease in new flats being approved drove the amount reduced.
This sent the dollar spiralling below 70 US cents, purchasing 69.85 following the Australian Bureau of Statistics figures were published.
This release of information comes before this Reserve Bank’s meeting on Tuesday with markets placing a 50 per cent probability the rate of interest will be cut.
The weak housing market, lousy inflation data and reduced consumer confidence push the situation for the first cut because of 2016.
AMP Capital chief economist Shane Oliver said he’d”pencilled” at the RBA slashing the official cash rate by 0.25 per cent, leaving it in a new record low of 1.25 per cent.
He explained there would be a case mounted to leave it on hold until after the election to prevent politicizing the conclusion during the campaign.
Its been Sydney’s worst decline since the company began collecting data four years ago was 9.6 per cent between 1989 and 1991, while Melbourne’s worst decrease was 10 per cent between 1989 and 1992.