Australia’s dollar fell from a four-month high as Chinese stocks dropped amid a jump in money-market rates, damping investor confidence in the outlook for the South Pacific nation’s biggest overseas market.
The currency climbed to a one-month high against its New Zealand counterpart after data showed inflation quickened more than forecast in the bigger nation, adding to prospects the Reserve Bank of Australia will halt cuts to borrowing costs. The kiwi slid against all 16 of its major peers as a technical indicator signaled the currency has risen too rapidly.
“The Aussie’s strength isn’t sustainable,” said Masashi Murata, a currency strategist in Tokyo at Brown Brothers Harriman & Co. Investors are sensitive to money-market rates in Asia’s largest economy because “they have skepticism about China’s financial system.”
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