Australia Bonds Have Worst Week Since 2001; Aussie Trims Losses

Australian government bonds suffered their biggest weekly rout since 2001 as the Federal Reserve signaled it may begin tapering stimulus this year, reducing the appeal of the South Pacific nation’s assets.

The Aussie dollar was set for its biggest weekly drop versus the greenback since September 2011 after Fed Chairman Ben S. Bernanke said quantitative easing could end next year if economic improvement continues. Volatility in the currency jumped to the highest in 1 1/2 years as Chinese money-market rates surged to a record.