Australian Dollar Falls as Asian Stocks Drop on China Tightening Concern

The Australian and New Zealand dollars fell against most major counterparts after Chinese reports backed the case for Asia’s largest economy to take more tightening measures.

Australia’s currency fell for the fourth time in five days versus the U.S. dollar as China’s government said gross domestic product expanded faster than economists forecast and inflation accelerated to the quickest pace in 23 months. New Zealand dollar’s dropped against 15 of 16 of the most-traded currencies as a report showed consumer confidence declined.

“When people start questioning the future growth of China that is going to affect the region and the growth currencies, Aussie and Kiwi,” said Dean Popplewell, an analyst in Toronto at the online currency-trading firm Oanda Corp. “China is their biggest trading partner.”

Australia’s dollar slid 0.4 percent to 98.32 U.S. cents at 11:55 a.m. in New York from 98.71 cents yesterday, after climbing to $1.0004 on Oct. 15, the strongest since it was freely floated in 1983. The currency fell 0.2 percent to 79.85 yen.

New Zealand’s dollar declined 0.7 percent to 75 cents from 75.50 cents and weakened 0.5 percent to 60.89 yen.

China’s gross domestic product grew 9.6 percent in the third quarter from a year earlier, topping the 9.5 percent estimate in a Bloomberg News survey. Consumer prices rose 3.6 percent in October, after gaining 3.5 percent the prior month, the statistics bureau said in Beijing.

Lending, Deposit Rates

“Most interesting is consumer inflation,” Roland Randall, a fixed-income and foreign-exchange strategist at TD Securities Inc. in Singapore, wrote in a research note. This “will fuel speculation of further monetary-policy tightening before the end of this year.”

China’s central bank increased its lending and deposit rates on Oct. 19. The one-year deposit rate climbed to 2.5 percent from 2.25 percent, the central bank said on its website.

New Zealand’s dollar fell after an index compiled by ANZ National Bank Ltd. and Roy Morgan Research showed consumer confidence declined to 113.6 this month from 116.4 in September.

To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net.

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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