“The Australian and New Zealand dollars remained lower as demand weakened for commodity-related currencies on deepening concern that China’s growth is slowing.
The so-called Aussie held its biggest slide in a week after a private report showed business confidence declined in August, fanning speculation the Reserve Bank of Australia will resume interest-rate cuts to counter the impact of a global slowdown. Demand for the South Pacific nations’ currencies was supported by bets the Federal Reserve will announce a new round of asset purchases known as quantitative easing this week.
“The Aussie has been underperforming, which probably comes down to indications of softening around the edges of the Australian economy, as well as concern that the regional economy, notably China, is going to slow down,” said Todd Elmer, a currency strategist at Citigroup Inc. in Singapore. “The market has priced in a persistent risk of rate cuts” by the RBA.”
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