The Australian dollar fell today to the the one-month lowest level against the U.S. dollar after the report of unexpected drop in housing approvals in June.

The Aussie repeats the yesterday’s decline of the New Zealand dollar, when it has fallen sharply after the housing approvals there dropped to 20-year low.

Unlike New Zealand, the Australian central bank didn’t cut interest rates this year yet. Currently the policy interest rate is at its highest level since 1996 at 7.25 percent. But some traders start to talk about future cuts, because there were no increases since April.

June report on building approvals showed 7.8 percent decline compared to June 2007 and 0.7 percent decline compared to May 2008 on a seasonally adjusted basis. It was an unpleasant surprise for the Aussie bulls, but not as tough as the yesterday’s decline in approvals has been for Kiwi.

The report raised the probability that the interest rate will be cut during the next months in Australia. On the other hand, the Reserve Bank of Australia may choose other ways to stimulate economy and leave the rate to hold down the inflation, but the currency is declining nevertheless.

AUD/USD dropped from 0.9525 to 0.9483 as of 8:28 GMT today with the daily low at 0.9458. AUD/JPY went down from 102.97 to 102.32. AUD/NZD didn’t support the trend with other currency pairs and rose from 1.2876 to 1.2891 as the New Zealand dollar still suffered from the yesterday’s housing report.

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