The Australian and New Zealand dollars declined versus most of their major peers before reports that may show global manufacturing is struggling to recover, weighing on risk appetite.
The currencies dropped as Asian stocks declined ahead of purchasing managers indexes data due tomorrow in Europe and China. The so-called Aussie and kiwi slipped against the greenback before the Federal Reserve releases minutes of its latest policy meeting. Demand for the South Pacific nationsâ€™ dollars was supported prior to meetings this week between Europeâ€™s leaders amid speculation they can agree on steps to contain the regionâ€™s debt crisis.
â€œMarkets may at some point in time here get a little disappointed that the policy initiatives to date are just not doing their job in righting the ship,â€ said Gavin Stacey, chief rate strategist in Sydney at Barclays Plc. â€œThat mindset obviously would tend to reverse all the recent directional shifts in the market, including a bit of buoyancy in the Australian dollar.â€
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