The Australian dollar swung between gains and losses against its U.S. counterpart, with the currency pair’s volatility near the most in 1 1/2 years, as a cash squeeze in China roiled demand for higher-yielding assets.
The Aussie struggled to sustain a two-day rally as China’s central bank signaled it will keep efforts to curb credit growth and the nation’s shares sank into a bear market. Australia’s government bonds rebounded after Federal Reserve Bank of Dallas President Richard Fisher said investors shouldn’t overreact to the U.S. central bank’s plan to slow bond purchases.
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