This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/world/2014/jan/25/australian-dollar-low-china-growth-fears

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Australian dollar heads for four-year low amid China growth fears Australian dollar heads for four-year low amid China growth fears
(7 months later)
The The Australian dollar has dropped below US$0.87 for the first time since July 2010 amid concerns about growth in China and the knock-on effects for emerging markets.
Australian dollar has dropped below US$0.87 for the first time since China’s bank regulator ordered regional offices to increase scrutiny of credit risks in the coal-mining industry, according to people with knowledge of the matter.
July 2010 amid concerns about growth in China and the knock-on effects At the same time, emerging market assets were hit by worries about slowing growth in China as well as political problems in Turkey, Argentina and Ukraine.
for emerging markets. The Aussie slid versus all 16 major currencies after the Wall Street Journal cited Reserve Bank member Heather Ridout as saying around 80 cents would be a fair deal for everybody.
China’s The nation’s three-year bond yield slid by the most in four months amid increased demand for the relative safety of sovereign bonds.
bank regulator ordered regional offices to increase scrutiny of credit Both stories have “combined to hurt the Aussie,” said Greg Gibbs, a Singapore-based strategist at Royal Bank of Scotland Group. “The Australian dollar is going to be treated as low-risk insurance against possible financial stress in China.”
risks in the coal-mining industry, according to people with knowledge of
the matter.
At
the same time, emerging market assets were hit by worries about slowing
growth in China as well as political problems in Turkey, Argentina and
Ukraine.
The
Aussie slid versus all 16 major currencies after the Wall Street
Journal cited Reserve Bank member Heather Ridout as saying around 80
cents would be a fair deal for everybody.
The
nation’s three-year bond yield slid by the most in four months amid
increased demand for the relative safety of sovereign bonds.
Both
stories have “combined to hurt the Aussie,” said Greg Gibbs, a
Singapore-based strategist at Royal Bank of Scotland Group. “The
Australian dollar is going to be treated as low-risk insurance against
possible financial stress in China.”
The dollar tumbled almost 1% in 24 hours to stand at US$0.8688 on Saturday morning after enduring more overnight losses when it dipped as low as US$0.8662.The dollar tumbled almost 1% in 24 hours to stand at US$0.8688 on Saturday morning after enduring more overnight losses when it dipped as low as US$0.8662.
It fell to NZ$1.0525, a level unseen since December 2005.It fell to NZ$1.0525, a level unseen since December 2005.
The The Aussie was not helped by another overnight sell-off in the US where concerns about emerging markets saw the S&P500 index of major stocks post its worst week since June 2012.
Aussie was not helped by another overnight sell-off in the US where The S&P 500 fell 2.6 percent for the week, closing below its 50-day moving average Friday for the first time since 9 October, suggesting more selling may be ahead for the market that closed 2013 with a 30% gain.
concerns about emerging markets saw the S&P500 index of major stocks
post its worst week since June 2012.
The
S&P 500 fell 2.6 percent for the week, closing below its 50-day
moving average Friday for the first time since 9 October, suggesting
more selling may be ahead for the market that closed 2013 with a 30%
gain.
The day's decline was also the biggest percentage drop since June 2013 for the index.The day's decline was also the biggest percentage drop since June 2013 for the index.
"There's "There's definitely some nervousness. The world is suffering from the emerging markets' flu," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
definitely some nervousness. The world is suffering from the emerging Worries over China's growth surfaced after a disappointing manufacturing number spurred the S&P 500's 0.9 percent drop on Thursday.
markets' flu," said Michael James, managing director of equity trading
at Wedbush Securities in Los Angeles.
Worries
over China's growth surfaced after a disappointing manufacturing number
spurred the S&P 500's 0.9 percent drop on Thursday.
The Turkish lira hit a record low and the South African rand fell to five-year low against the dollar.The Turkish lira hit a record low and the South African rand fell to five-year low against the dollar.
Argentina's Argentina's government said Friday it would relax stringent foreign-exchange controls, after it abandoned its long-standing policy of intervening to support the peso currency. That resulted in the currency's steepest plunge since the 2002 financial crisis.
government said Friday it would relax stringent foreign-exchange With many market participants expecting the Federal Reserve to decide next week to shave its stimulus by another $10 billion a month, investors also worried that interest rates will soon begin to rise. Fed policymakers will conclude a two-day meeting on Wednesday.
controls, after it abandoned its long-standing policy of intervening to China’s efforts to contain a “financial excesses” won’t be positive for growth, Gibbs said. The next major psychological level for Aussie is the 2010 low near 80 cents, he said.
support the peso currency. That resulted in the currency's steepest The China Banking Regulatory Commission’s order did not mention concerns that a 3 billion yuan (US$496 million) trust product distributed by Industrial & Commercial Bank of China may default after a coal miner that borrowed the funds collapsed, said the people, who asked not to be identified. Regional CBRC offices were told to also closely monitor risks from trust and wealth management products, they said.
plunge since the 2002 financial crisis.
With
many market participants expecting the Federal Reserve to decide next
week to shave its stimulus by another $10 billion a month, investors
also worried that interest rates will soon begin to rise. Fed
policymakers will conclude a two-day meeting on Wednesday.
China’s
efforts to contain a “financial excesses” won’t be positive for growth,
Gibbs said. The next major psychological level for Aussie is the 2010
low near 80 cents, he said.
The China Banking Regulatory Commission’s order did not mention concerns that a 3 billion yuan
(US$496 million) trust product distributed by Industrial &
Commercial Bank of China may default after a coal miner that borrowed
the funds collapsed, said the people, who asked not to be identified.
Regional CBRC offices were told to also closely monitor risks from trust
and wealth management products, they said.
China is Australia’s largest trading partner.China is Australia’s largest trading partner.
Reserve Reserve Bank of Australia Governor Glenn Stevens signaled last month that a weaker local currency is preferable over lower interest rates to help spur the nation’s economy. In an interview with the Australian Financial Review, he said “85 U.S. cents would be closer to the mark.”
Bank of Australia Governor Glenn Stevens signaled last month that a The Aussie has dropped 15 percent in the past year, the biggest drop among 10 developed nation currencies tracked by Bloomberg Correlation Weighted Indexes. The kiwi is up 2.1 percent.
weaker local currency is preferable over lower interest rates to help
spur the nation’s economy. In an interview with the Australian Financial
Review, he said “85 U.S. cents would be closer to the mark.”
The
Aussie has dropped 15 percent in the past year, the biggest drop among
10 developed nation currencies tracked by Bloomberg Correlation Weighted
Indexes. The kiwi is up 2.1 percent.
RBA board member Ridout was today reported as saying that the currency hasn’t fallen sufficiently.RBA board member Ridout was today reported as saying that the currency hasn’t fallen sufficiently.