AUD/USD Near 0.9450 Over its Shrinking Interest Rate Advantage

The Australian dollar fell to the lowest level since 2011 as the nation’s shrinking interest-rate advantage over its peers damps the allure of the currency.

Insight Investment Management Ltd., which oversees about $134 billion in fixed income and currencies, has been selling the Aussie as the yield spread between Australia’s sovereign debt and its global peers narrowed by almost half a percentage point since March. The Australian and New Zealand currencies slid against the yen for a third day as Asian stocks extended a global rout, sapping demand for riskier assets. Australia’s April trade surplus narrowed more than economists forecast.

“The Aussie’s trend is clearly downward,” said Kengo Suzuki, the chief currency strategist at Mizuho Securities Co. in Tokyo. “The Australian dollar remains susceptible to selling when markets are in a risk-off situation.”


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