Sept. 6 (Bloomberg) -- The Australian dollar dropped to its lowest level in more than a week on speculation Europe’s sovereign debt crisis will impede global economic growth, damping demand for higher-yielding assets.
The Aussie earlier pared declines after the Reserve Bank of Australia left interest rates unchanged and said the nation is benefiting from a mining boom even as volatility in financial markets hurts confidence. New Zealand’s currency fell against 15 of its 16 major peers as Asian stocks slid.
“There’s a lot of uncertainty around Europe, but we still like the medium-term Australian story, so we would be buyers on dips,” said Grant Turley, a senior currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “The RBA is saying that domestically the outlook is still quite strong, but the rest of the world is looking highly uncertain, so it’s not appropriate to hike, but it’s not appropriate to cut rates either.”
Australia’s currency fell 0.2 percent to $1.0527 as of 11:35 a.m. in New York from $1.0551 yesterday, and touched $1.0487, the least since Aug. 26. It rose 0.4 percent to 81.49 yen. New Zealand’s dollar slid as low as 82.15 U.S. cents, the least since Aug. 23, before buying 82.51 cents from 83.22 cents yesterday. The currency weakened to 63.84 yen from 63.98 yen.
Factory orders in Germany, Europe’s largest economy, dropped 2.8 percent from June, when they rose 1.8 percent, the Economy Ministry in Berlin said in a statement today.
The Australian dollar erased some of its earlier losses after the RBA left interest rates unchanged at 4.75 percent for a ninth-straight meeting. Governor Glenn Stevens said in a statement today that “global financial markets have been very unsettled over recent weeks.”
--With assistance from Catarina Saraiva in New York. Editors: Paul Cox, Greg Storey
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