THE dollar dipped below the US90c mark yesterday as expectations of a rate cut next week rose following bearish rhetoric from the Reserve Bank governor.
At 5pm AEST the local unit was trading at US89.58c, down from US90.16c on Wednesday.
The dollar fell below US90c overnight after US economic growth figures for the June quarter came in stronger than expected.
Commonwealth Bank currency strategist Peter Dragicevich said the local currency had been falling since Glenn Stevens' speech to a business lunch on Tuesday, when his bearish rhetoric was interpreted as a hint that the RBA would cut rates again on August 6.
Even downward pressure on the greenback, after the US Federal Reserve said it would continue with its massive bond-buying program, didn't help the Aussie, he said.
The futures market is now pricing in a 96 per cent chance of a cut, taking the cash rate to 2.5 per cent.
