Sept. 25 (Bloomberg) -- The Australian dollar may drop on concerns a slowdown in the U.S. economy, the world's largest, will cut demand for raw materials.

Australia's dollar fell against 14 of 16 major currencies tracked by Bloomberg amid expectations U.S. reports this week may show personal income and new home sales slowed in August. About 10 percent of Australia's growth comes from commodity exports.

``You have a possible U.S. slowdown story which means the Australian dollar isn't exactly a sexy story,'' said Peter Pontikis, a treasury strategist at Suncorp-Metway Ltd. in Brisbane, Australia. ``Commodity markets are also coming off.''

Australia's dollar traded at 74.93 U.S. cents at 9:57 a.m. in Sydney from 75.45 cents in late Asian trading Sept. 22. The currency fell to 75.00 cents in late New York trading Sept. 22 after reaching a two week high of 75.76 cents. Australia's currency could fall to 74.80 cents today, Pontikis said.

The Reuters/Jefferies CRB Commodity Price Index slid 1.2 percent Sept. 22 to be just above the 14-month low reached Sept. 20. The Australian dollar is sensitive to commodity prices because 60 percent of the country's exports are raw materials.

Australia's currency fell to a 2 1/2 month low against the euro as traders who were betting the Australian dollar would rise decided to sell positions.

``A lot of Europeans don't like the idea of a slower growth story and there was significant stop loss interest in the Australian dollar against the euro,'' Pontikis said.

Australia's dollar traded at 0.5859 euros, and earlier reached 0.5858, the lowest since July 11. It traded at 0.5868 late in New York Sept. 22.

The yield on the Australian government two-year note fell 6 basis points, or 0.06 percentage point, to 5.82 percent.

The price of the 8.75 percent bond maturing in August 2008 rose 0.106, or A$1.06 per A$1,000 face amount, to 105.141. Bond yields move inversely to price.

To contact the reporter on this story: David McIntyre in Sydney at dmcintyre2@bloomberg.net

Last Updated: September 24, 2006 20:31 EDT