Aussie Falls to Six-Week Low on China Caution, Sagging Sentiment

Australia’s dollar fell to a six-week low as traders weighed prospects for growth in China, the South Pacific nation’s biggest trading partner, before a four-day Communist Party summit ends today.

The currency extended an intraday decline after a report from National Australia Bank Ltd. showed business confidence fell. The Aussie weakened for a third day yesterday after Chinese loan growth slowed more than forecast last month. Australia’s 10-year government bond yields climbed to the highest in more than 1 1/2 years.

Australia’s dollar lost 0.1 percent to 93.50 U.S. cents as of 12:10 p.m. in Sydney after touching 93.37, the weakest since Oct. 2. It had weakened 1.8 percent in the three days through yesterday. New Zealand’s currency was little changed at 82.54 U.S. cents.

Benchmark 10-year bond yields in Australia rose three basis points, or 0.03 percentage point, to 4.26 percent. It earlier touched 4.29 percent, the highest since March 2012.

A sentiment gauge among Australian businesses fell to 5 in October from 12 the prior month, NAB said today. It separately pushed back its forecast for a Reserve Bank of Australia rate cut to May from February, citing a slower increase in unemployment.

Chinese President Xi Jinping and hundreds of top Communist leaders are gathered in Beijing to map out an economic blueprint to sustain growth and drive the urbanization of hundreds of millions of rural residents. A communique will be released after the meeting ends outlining the road map.

New yuan loans grew by 506.1 billion yuan ($83.1 billion) in October, down from a 787 billion yuan increase in the previous month. Analysts forecast a 580 billion yuan gain.

(Source: Bloomberg)