The Aussie Dollar Takes Another Hit, Biggest Drop Since August

“Australia’s dollar fell against all of its 16 major counterparts as U.S. lawmakers prepared to resume talks on how to avoid spending cuts and tax increases that could send the world’s biggest economy into recession.

The so-called Aussie headed for the biggest monthly drop since August versus the greenback and New Zealand’s dollar held an eight-day retreat after Treasury Secretary Timothy F. Geithnersaid he will take “extraordinary measures” to postpone a U.S. default into early 2013 while President Barack Obama and Congress work out a deficit-reduction deal. Declines in the South Pacific nations’ currencies were limited before data that may signal a pickup in China’s economy.

“Uncertainty and concerns about the fiscal cliff are starting to weigh on risk markets,” said Peter Dragicevich, a currency economist in Sydney at Commonwealth Bank of Australia. (CBA) “The Aussie and the kiwi are naturally susceptible to declines in global equity markets, particularly the U.S. markets.”

The Australian dollar slid 0.3 percent to $1.0349 as of 4:07 p.m. in Sydney, headed for a 0.8 percent decline this month. The Aussie bought 88.81 yen from 88.87 yesterday.

New Zealand’s dollar was unchanged at 81.98 U.S. cents from yesterday, when it touched 81.56, the lowest since Nov. 23. The currency fell 3.1 percent in the eight sessions through yesterday. It rose 0.3 percent to 70.35 yen.

Yields on 10-year Australian government bonds advanced one basis point to 3.35 percent…”

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