Dec. 28 (Bloomberg) -- Australia’s dollar fell against most of its 16 major counterparts as U.S. lawmakers prepared to resume talks on how to avoid spending cuts and tax increases that could tip the world’s biggest economy into recession.
The Aussie was little changed against the greenback and New Zealand’s dollar snapped eight days of losses after Treasury Secretary Timothy F. Geithner said he will take “extraordinary measures” to postpone a U.S. default into early 2013 while President Barack Obama and Congress work out a deficit-reduction deal. Data on Dec. 31 may signal a pickup in China’s economy.
“They’re really responding to broader market sentiment, specifically you’re looking at these fiscal-cliff headlines,” Eric Viloria, senior currency strategist for Gain Capital Group LLC in New York, said in a telephone interview. “That’s really the driver here for most of the currencies.”
The Australian dollar was little changed at $1.0377 in New York. The Aussie bought 89.32 yen from 88.87 yesterday.
New Zealand’s dollar gained 0.1 percent to 82.09 U.S. cents. It rose 0.6 percent to 70.66 yen.
Senate Majority Leader Harry Reid said a resolution to the budget dispute before Jan. 1 appears unlikely because Republicans won’t cooperate, pushing the U.S. closer to more than $600 billion in automatic tax increases and spending cuts set to begin in January.
The purchasing manager’s index of Chinese manufacturing by HSBC Holdings Plc and Markit Economics may rise to 50.9 in December from 50.5 the previous month, according to the median estimate of economists surveyed by Bloomberg News before the data due on Dec. 31. A separate, government-backed index of nonmanufacturing due on Jan. 1 will show an increase to 51 this month from 50.6 in November, economists estimate.
China is Australia’s biggest trading partner and New Zealand’s second-largest export market.
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