Australia’s dollar dropped against its 16 major peers after a private report showed manufacturing unexpectedly contracted in China, the South Pacific nation’s biggest export market.
The decline erased a gain versus the greenback yesterday when data showed inflation in Australia accelerated. The nation’s three-year bond yields fell, ending a two-day advance. New Zealand’s dollar rose against the Aussie for the first time in three days after Prime Minister John Key said the smaller nation’s economy will grow strongly this year.
“The Aussie is more likely to fall,” said Hideki Shibata, a senior interest-rate and currencies strategist at Tokai Tokyo Research Center Co. “China’s growth outlook is posing a risk to countries like Australia that rely on trade with the nation.”