The Australian and New Zealand dollars held declines this week against most of their major peers as the risk of a potential U.S. government shutdown cut demand for higher-yielding assets.
The Aussie slid to the lowest in a week yesterday against the U.S. dollar, retreating from a three-month high reached Sept. 19, before the release of a government report on Australian job vacancies. The kiwi has tumbled from a four-month high. Congress has until the end of this month to agree on spending measures.
“Everyone’s been talking about the U.S. debt ceiling debate a little bit more, and using it as an excuse to take a little bit of risk off the table given the run-up in both antipodean currencies in the past few weeks,” said Michael Turner, a debt and currency strategist at Royal Bank of Canada in Sydney. “Aussie’s not really in capitulation mode, it’s just under modest pressure.”
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