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Aussie Touches Seven-Week Low as GDP Misses Estimates

Sept. 5 (Bloomberg) -- Australia’s dollar touched its lowest level in more than seven weeks as growth in the nation slowed more than forecast in the second quarter.

The so-called Aussie fell to a six-week low versus the yen before reports today that may show euro-area retail sales dropped in July and services shrank last month. Data yesterday showed a contraction in U.S. manufacturing. Demand for New Zealand’s dollar, nicknamed the kiwi, was supported after figures showed the value of the nation’s construction rose.

“The incoming anecdotal evidence from key resource companies in Australia remains poor,” said Sue Trinh, a senior currency strategist in Hong Kong at Royal Bank of Canada. “The outlook for Aussie remains rather poor given the deterioration in the global growth backdrop as well.”

The Australian dollar lost 0.4 percent to $1.0183 at 5:47 p.m. in Sydney after earlier touching $1.0174, the lowest since July 13. It reached 79.76 yen, the weakest since July 25, before trading at 79.83, 0.5 percent lower than yesterday’s close. New Zealand’s currency bought 79.24 U.S. cents from 79.45 yesterday. It dropped 0.3 percent to 62.12 yen.

Australia’s 10-year yield declined five basis points, or 0.05 percentage point, to close at 3.04 percent. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, slid 5.5 basis points to 2.625 percent.

Below Estimates

Australia’s gross domestic product advanced 0.6 percent in the second quarter from the previous three months, when it rose a revised 1.4 percent, a Bureau of Statistics report released today showed. The result compared with the median of 26 estimates in a Bloomberg News survey for a 0.7 percent gain.

In New Zealand, the value of construction increased 0.8 percent to NZ$1.7 billion ($1.35 billion) in the second quarter after a 0.4 percent drop in the three months through March, Statistics New Zealand said today. Residential building jumped 7.1 percent and non-residential work fell 5.6 percent.

The Aussie has declined 4.3 percent in the past month, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The kiwi posted the second-biggest drop, falling 3.8 percent.

“There’s still a theme of very weak economic data out of the euro zone,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “Both the Aussie and kiwi have turned down and are heading towards the bottom” of their ranges, he said.

Sales in the euro region probably fell 0.2 percent in July after advancing 0.2 percent the previous month, according to the median estimate of economists in a Bloomberg survey before the European Union’s statistics office releases the figures today. A final reading due today of an index based on a survey of purchasing managers in services industries in the currency bloc may confirm a drop to 47.5 in August from 47.9 in July, a separate poll showed.

To contact the reporter on this story: Kristine Aquino in Singapore at

To contact the editor responsible for this story: Rocky Swift at

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