Oct. 11 (Bloomberg) -- The Australian dollar declined against the U.S. currency after Slovakia’s ruling coalition failed to end a dispute over participation in a euro-area bailout fund, damping demand for higher-yielding assets.
The New Zealand dollar fell against most of its 16 major peers after government financial statements showed the nation’s budget deficit was wider in the fiscal year ended June 30 than earlier forecast. Losses were limited for the South Pacific nations’ currencies as Asian stocks gained.
“Risk-correlated currencies could trade sideways over the next month as we wait for more positive developments out of Europe,” said Roland Randall, a Singapore-based strategist for rates and foreign exchange at TD Securities Inc., who expects the Australian dollar could fall as low as 92 U.S. cents. “A bigger budget deficit does weaken the outlook for New Zealand at a margin and therefore make it more vulnerable to rising risk aversion.”
Australia’s dollar declined to 99.66 cents at 2:47 p.m. in Sydney, from 99.88 cents in New York yesterday. The currency dropped 0.2 percent to 76.40 yen. New Zealand’s dollar slid 0.2 percent to 78.21 U.S. cents from yesterday. The kiwi lost 0.2 percent to 59.98 yen.
--Editors: Nate Hosoda, Benjamin Purvis
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