The Australian dollar fell to the lowest level in more than two weeks as the U.S. lawsuit against Goldman Sachs Group Inc. began prompting inquiries in Europe, damping investor appetite for higher-yielding assets.
The currency, nicknamed the Aussie, also dropped as China, Australia’s biggest trading partner, took steps to rein in credit and before a meeting this week of Greek, European and International Monetary Fund officials to discuss aid for Greece. New Zealand’s currency fluctuated before a report forecast to show consumer prices rose.
“Goldman’s status as a leader among U.S. investment banks makes the probe more significant than scrutiny of a smaller firm, and with the prospects of further probes, that may be damping risk appetite,” said Imre Speizer, a market strategist in Wellington at Westpac Banking Corp. The market also “will be looking to see whether Greece is going to formally seek funding,” Speizer said.
Australia’s currency dropped 0.6 percent to 91.84 U.S. cents at 12:37 p.m. in New York, from 92.43 cents on April 16. The currency earlier touched 91.58 U.S. cents, the lowest level since April 1. The Aussie weakened 0.5 percent to 84.74 yen after touching 83.94 yen, the lowest level since March 29.
New Zealand’s dollar fell 0.3 percent to 70.66 U.S. cents, from 70.85 cents on April 16, after strengthening earlier as much as 0.4 percent. It declined 0.1 percent to 65.23 yen, compared with 65.31 yen.
U.K. Prime Minister Gordon Brown called yesterday for the Financial Services Authority to start an investigation into Goldman Sachs, saying he was “shocked” at the “moral bankruptcy” indicated in a suit filed against the bank last week by the U.S. Securities and Exchange Commission. Germany’s financial regulator, Bafin, asked the SEC for details on the suit, a spokesman for Chancellor Angela Merkel said.
China told its banks to stop loans for third-home purchases in cities with excessive property price gains. The nation’s latest move to cool its property market came after prices gained a record 11.7 percent in March.
New Zealand’s consumer prices climbed 0.6 percent in the first quarter after a 0.2 percent decline in the last quarter of 2009, according to the median estimate of 14 economists in a Bloomberg News survey before Statistics New Zealand reports the data at 6:45 p.m. New York time.
Talks on Greece involving the European Commission, the IMF and the European Central Bank were delayed to April 21 from today because of the volcanic ash cloud disrupting European air travel.