The Australian dollar fell before U.S. data forecast to show orders for durable goods rose in April, adding to signs of a sustained recovery in the world’s largest economy and diminishing the need for monetary stimulus.
The Aussie is set for a third weekly decline amid speculation a strengthening U.S. economy will prompt the Federal Reserve to pare back on its bond-buying program. New Zealand’s dollar weakened, trimming this week’s advance, after a government report showed the nation’s trade surplus for April was less than economists estimated. Both South Pacific nation’s currencies were lower against the yen as stock declines worldwide spurred investors to sell higher-yielding assets.
“There’s a lot of negative sentiment around the Aussie,” said Peter Dragicevich, a Sydney-based currency economist at Commonwealth Bank of Australia (CBA), the nation’s largest lender. “The discussion has shifted toward when will the Fed taper its asset purchases,” boosting the U.S. dollar, he said.