Aussie Declines to Eight-Week Low on Korea Tension

The Australian dollar declined to the lowest level in almost eight weeks against the greenback as concerns military action in Korea will escalate damped demand for riskier assets.

The Australian and New Zealand dollars dropped against most of their major counterparts after South Korea resisted China’s call to resume six-party talks following last week’s exchange of artillery fire between South and North Korea. Demand for the so- called Aussie also fell after a report today showed Australian business profits declined last quarter.

“People don’t want to keep buying the Aussie due to the Korean situation as it is not only a commodity currency, but also an Asian currency,” said Marito Ueda, senior marketing director at FX Prime Corp., a foreign-exchange margin company in Tokyo.

Australia’s currency fell to 95.85 U.S. cents as of 12:28 p.m. in Sydney, the lowest since Oct. 5, from 96.45 in New York on Nov. 26. The Aussie slid to 80.69 yen from 81.12 yen.
New Zealand’s dollar, nicknamed the kiwi, declined 74.60 U.S. cents from 74.99 cents, after reaching 74.48 cents, the lowest since Oct. 28. The kiwi was at 62.67 yen from 63.06 yen.
(Source: Bloomberg)