The Australian and New Zealand dollars headed for their first weekly declines this month against the greenback as the risk of a U.S. government shutdown cut demand for higher-yielding assets.
The Aussie fell for a fourth day before the Reserve Bank of Australia meets next week to set policy. Australia’s Treasurer said today the nation’s budget has worsened since last month. New Zealand’s central bank said in its annual report that the kiwi remains elevated, before revealing it bought a net NZ$1 million ($828,600) in August. The U.S. Congress has until the end of this month to agree on spending measures, with the country set to hit its borrowing limit next month.
“I don’t think people will be too willing to take any big positions with that kind of event risk on the horizon,” said Richard Breen, a Sydney-based senior consultant at Rochford Capital, a currency and interest-rate risk management company. “If Aussie can hold above 93.40 U.S. cents, and we do get some kind of resolution out of the U.S., then I think it has the legs to go higher.”
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