The Aussie Dollar Falls on the Risk Off Trade, While The Kiwi Pops on Recovery Talk

“Australia’s dollar slid against most of its 16 major counterparts as Asian stocks declined, sapping demand for higher-yielding assets.

New Zealand’s dollar climbed toward a three-month high versus the so-called Aussie after the smaller nation’s central bank said it expects the economy to recover. Losses were limited in the New Zealand and Australian currencies ahead of a Chinese report tomorrow that economists predict will show manufacturing expanded this month in the world’s second-largest economy.

“Risk sentiment is deteriorating on the back of stock declines, weighing on the Australian and New Zealand dollars,” said Kengo Suzuki, a currency strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value.

Australia’s dollar dropped 0.3 percent to $1.0390 as of 3:58 p.m. in Sydney and is little changed this month. New Zealand’s currency, known as the kiwi, fell 0.1 percent to 83.50 U.S. cents, paring a monthly gain to 0.8 percent.

The MSCI Asia Pacific Index (MXAP) of shares lost 0.3 percent, snapping a two-day gain.

The kiwi strengthened 0.1 percent to NZ$1.2442 per Australian dollar. It reached NZ$1.2429 on Jan. 25, the strongest since Oct. 9. Two-year interest-rate swaps in New Zealand fell one basis point to 2.89 percent….”

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