AUD Falls on Weak Business Confidence

The Australian dollar declined today against the U.S. dollar and the Japanese yen as the country’s stock markets fell after the report on the November business confidence came out showing the record low reading for the index.
The Aussie is also under pressure from the high-yielding assets’ correction after the yesterday’s growth. The New Zealand dollar, which often trades in a strong correlation with its Australian counterpart also fell today, but at a slower pace.
The business confidence survey for November showed a decline of the index from -29 to -30 — the lowest level since 1989 — the year when this survey was first conducted. Traders also expect a jump in the unemployment rate to be shown in the report which comes out this Thursday.
Currency analysts believe that the future of the risk-sensitive currencies (Aussie is one of them with its 4.25 percent interest rate) isn’t too optimistic. The stock sell-off may still continue in such countries as Australia and New Zealand and the strong dependence on the commodity prices will keep the currencies down for as long as the financial crisis is keeping the global economy from growing at a normal pace.
AUD/USD fell from 0.6647 to 0.6505 as of 8:20 GMT today. AUD/JPY declined from 61.74 to 60.10, while AUD/NZD went down only slightly today — from 1.2152 to 1.2122.

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