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The Aussie Dollar Falls on U.S. Election Prospects

Australia’s dollar fell as declines in Asian shares and concern over the outcome of the U.S. presidential election sapped demand for higher-yielding assets.

New Zealand’s dollar weakened against most major peers as U.S. President Barack Obamaand Republican Mitt Romney entered the final stretch of the presidential contest, where opinion polls have tightened. Losses in the so-called Aussie were limited as traders reduced bets that the Reserve Bank of Australia will cut interest rates at a meeting next week.

“If we get polls that still show that Romney and Obama look to be pretty neck-and-neck, then I think that leads to uncertainty,” said Ray Attrill, Sydney-based global co-head of currency strategy at National Australia Bank Ltd. “There is potential for some negative price action in the risk market. In that case I can see the Aussie heading back down towards $1.03.”

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