Aussie Declines After Business Investment Drop Exceeds ForecastKristine Aquino
The Australian dollar dropped to the lowest in more than two weeks after government data showed business investment declined more than economists forecast.
The Aussie slid versus most of its 16 major counterparts and benchmark government bond yields touched a three-week low after iron ore prices fell for a sixth-straight day, the longest losing streak this year. New Zealand’s currency was little changed after a drop from yesterday.
“The headline number was disappointing and that’s clearly weighing on the Aussie,” said Divya Devesh, a foreign-exchange analyst at Standard Chartered Plc in Singapore. “The peak in mining investment is really very obvious now.”
The Australian dollar dropped 0.3 percent to 89.42 U.S. cents as of 4:58 p.m. in Sydney after earlier touching 89.17, the weakest since Feb. 10. New Zealand’s kiwi bought 83.27 U.S. cents after it declined 0.3 percent to 83.14 yesterday.
Australia’s 10-year yield touched 4.04 percent, the least since Feb. 5. The nation’s three-year yield dropped to as low as 2.84 percent, a level unseen since Feb. 4.
New Zealand’s two-year swap rate, a fixed rate made to receive floating rates that are sensitive to interest-rate expectations, was unchanged at 3.80 percent.
Capital spending in Australia dropped 5.2 percent in the three months ended December from the previous period, the statistics bureau said today. That’s the biggest decline since 2009 and compares with the median estimate for a 1.3 percent slide by economists surveyed by Bloomberg News before the report.
Citigroup Inc. cut its estimate for Australia’s fourth-quarter gross domestic product to 0.4 percent from 0.6 percent previously, following today’s data. The nation is set to publish growth figures for the last three months of 2013 on March 5.
Prices for 62 percent iron ore delivered to China’s port of Tianjin declined to $117.80 a metric ton yesterday, the lowest since July 1, according to data from The Steel Index Ltd. China is Australia’s largest export market.