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The Aussie Dollar Falls on Concerns ECB Rate Cut is Not Enough

“Australia’s dollar fell along with Asian stocks amid concern the European Central Bank’s cut ininterest rates yesterday won’t be enough to stem the region’s debt crisis, damping demand for riskier assets.

The so-called Aussie dollar trimmed its weekly gains versus the greenback and yen even afterChina yesterday cut its key interest rate for the second time in a month and the Bank of Englandexpanded asset purchases in efforts to bolster growth. Losses in New Zealand’s kiwi dollar were limited after the government said its deficit was narrower than forecast.

“The ECB didn’t announce extraordinary measures yesterday, such as possible bond purchases,” said Junya Tanase, chief currency strategist at JPMorgan Chase & Co. in Tokyo. “The market is jittery about the status quo in terms of the ECB’s handling of sovereign risks. The Aussie and kiwi are trading softer in such a risk-averse environment.”

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