“Australia’s dollar slid and New Zealand’s pared an earlier gain as Asian stocks declined and Chinese data added to signs the global growth is slowing, damping investor appetite for higher-yielding assets.
The so-called Aussie and kiwi fell from seven-week highs as a report signaled Chinese manufacturing may shrink for an eighth month and commodities dropped to the lowest level since 2010. The Federal Reserve yesterday decided to not implement more asset purchases and lowered growth forecasts. The New Zealand dollar rose earlier after a government report showed the nation’s economy was accelerating.
The Australian and New Zealand currencies “have been undermined on the day by the weakness in regional equity markets,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “It looks as though Asia was more disappointed than the U.S. equity market that the Fed didn’t take stronger action. It’s certainly spilling over to both Aussie and kiwi.”
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