“The Australian dollar declined, following yesterday’s biggest one-day drop in almost a month, as Asian stocks extended equity losses worldwide, curbing demand for higher-yielding assets.
The so-called Aussie slid versus its Japanese counterpart following a global commodities rout.New Zealand’s currency, known as the kiwi, dropped for a second day after central bank Governor Graeme Wheeler said yesterday he’s ready to intervene in foreign-exchange markets, prompting a surge in the local dollar’s volatility to a five-month high. Both South Pacific currencies fell as China told local authorities to “decisively” curb real estate speculation.
“There’s a bit of negative risk sentiment out there, so Aussie and kiwi have come under some pressure,” said Peter Dragicevich, a Syndey-based currency economist at Commonwealth Bank of Australia, the nation’s largest lender. “We expect them to bounce back over the next week or so.”
The Australian dollar lost 0.2 percent to $1.0233 as of 4:46 p.m. in Sydney after declining 1 percent to $1.0256 yesterday in the biggest drop since Jan. 24. The Aussie will rebound to $1.08 by Dec. 31, Dragicevich said. It bought 95.62 yen from 95.97 in New York.
Australia’s 10-year yield fell five basis points, or 0.05 percentage point, to 3.54 percent after touching a nine-month high of 3.61 percent yesterday.
The MSCI Asia Pacific Index (MXAP) of shares declined 1.6 percent. The Standard & Poor’s 500 Index tumbled 1.2 percent in New York yesterday, the largest drop since Nov. 14. The S&P GSCI Spot Index of 24 raw materials lost 1.1 percent, the most since Dec. 6, while the Thomson Reuters/Jefferies CRB Index declined 0.6 percent yesterday.
