Australia’s dollar extended declines versus the greenback from last week before U.S. data forecast to show improvement in consumer confidence that may add to the case for the Federal Reserve to slow stimulus.
Fed Chairman Ben S. Bernanke said last week the central bank may cut the pace of asset purchases if policy makers see indications of sustained growth. The currencies of Australia and New Zealand slid against their major peers on prospects slowing growth in China will curb exports for the South Pacific nations.
“The Fed’s slowing of stimulus would erode the Aussie dollar’s yield advantage,” said Takuya Kawabata, an analyst at Gaitame.com Research Institute Ltd. in Tokyo. “If data this week confirm a slowdown in the Chinese economy, the Oceanic currencies will come under further pressure.”