Australia’s dollar slid against its major peers after iron-ore prices touched a seven-month low while the yuan was near the weakest since July as the People’s Bank of China brought down its reference rate.
A gauge of trader expectations of future currency swings dropped to the lowest in more than a year before Federal Reserve Chair Janet Yellen speaks tomorrow, with investors looking for the central bank’s view on the economic impact of winter weather. The U.S. dollar headed for its biggest monthly slide since September against a basket of its major peers.
“If it was the case that China was ceasing the policy of yuan appreciation, that would probably have some implications for emerging-market currencies broadly,” said Ray Attrill, the global co-head of currency strategy at National Australia Bank Ltd. in Sydney. “That could feed into a weaker Aussie dollar.”
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