Australian Dollar Falls as Slowing U.S. Growth Weighed

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Tue, 31 Oct 2000, 12:04pm EST Australian Dollar Falls as Slowing U.S. Growth Weighed By Angela Jones

Sydney, Oct. 31 (Bloomberg) -- The Australian dollar fell as traders and investors sold the currency on concern the U.S. economy isn't slowing enough to stem demand for U.S. financial assets and the dollars to buy them.

Australia's dollar dropped as low as 51.68 U.S. cents from 52.42 cents in Asian trading yesterday. Analysts said the decline was exacerbated when the currency fell below 52 cents for the first time this week, triggering sell orders.

``More U.S. data is needed to indicate the U.S economy is slowing,'' said Jo Masters, currency strategist at Macquarie Bank. ``A shift in investor perception is the key driver for the Australian dollar.''

The Australian dollar gained yesterday after a report showing weaker-than-expected U.S. economic growth boosted optimism demand for U.S. financial assets may abate as investors channel their funds into other currencies.

A report Friday showed U.S. gross domestic product rose at a 2.7 percent annual rate in the three months ended Sept. 30, compared with a 3.6 percent pace forecast by analysts in a Bloomberg News survey.

Australia's economy will likely grow at more than 4.5 percent rate this year, according to J.P. Morgan. U.S. growth is forecast at 5.3 percent this calendar year.

The Australian dollar has tumbled 21 percent so far this year, dragged lower by a 17 percent slide in the euro as investors bought dollars.

Meantime, figures due today expected to show Australia posted its first trade surplus in more than three years may help stem the Australian dollar's drop. Tourism and the export of services, such as TV broadcasting rights for the Olympic Games, is expected to have boosted the surplus in the month.

The New Zealand currency fell to 39.93 U.S. cents from 40.33 cents yesterday.

A report from National Bank of New Zealand Ltd. showed the country's business confidence fell in October, to its lowest level since June.

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20Financial%20News&tp=ad_fin&T=au_storypage99.ht&s=AOf4PIhM3QXVzdHJh

-- Martin Thompson (mthom1927@aol.com), October 30, 2000


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