Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Aussie, N.Z. Dollars Fall as Growth Outlook Fuels Haven Demand

Don't Miss Out —
Follow us on:

Oct. 4 (Bloomberg) -- The Australian and New Zealand dollars dropped against their U.S. counterpart as signs of slowing global growth spurred demand for refuge.

The Aussie slid to a four-week low after the nation recorded its widest trade deficit since 2008 and data showed China’s non-manufacturing industries grew at the weakest pace since at least March 2011. New Zealand’s dollar fell versus most of its major peers. China is Australia’s biggest trade partner and New Zealand’s second-largest export market.

“The data highlight the challenges posed by expectations of slowing growth in China in an environment where the Australian dollar is persistently strong, supported by global central-bank portfolio diversification flows,” Eric Theoret, a currency strategist in Toronto at Bank of Nova Scotia’s Scotia Capital unit, wrote yesterday in a note to clients.

Australia’s currency depreciated 0.5 percent to $1.0216 yesterday in New York after touching $1.0196, its lowest level since Sept. 6. It was little changed at 80.19 yen.

The New Zealand dollar, nicknamed the kiwi, sank 1 percent to 81.94 U.S. cents and reached 81.74 cents, its lowest since Sept. 12. The kiwi fell 0.6 percent to 64.32 yen.

Commodities tumbled, with the Standard & Poor’s GSCI index of raw materials dropping 2.3 percent.

Trade Gap

The Aussie weakened after data showed the nation’s trade gap for August was almost three times wider than the median forecast of economists. Imports exceeded exports by A$2.03 billion ($2.07 billion) in August, versus a revised A$1.53 billion gap in July. The currency dropped on Oct. 2 after the Reserve Bank of Australia unexpectedly cut its benchmark interest rate a quarter-percentage point to 3.25 percent.

“We’re probably looking at another rate cut before the end of the year, probably at next month’s meeting,” Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York, said yesterday in a telephone interview. “After that, we would have a tendency to see steady rates through 2013.”

New Zealand’s dollar has strengthened 4 percent this year, the biggest increase among the 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes. The Aussie and U.S. dollars have fallen 1.9 percent.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.