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Aussie dollar sinks below 70 US cents as China threatens growth
[SYDNEY] The Australian dollar dropped below 70 US cents for the first time in six years before a report forecast to show slowing domestic economic growth amid signs of a slump in China.
The currency fell to as low as 69.98 cents Wednesday. It has dropped 4 per cent over the past month, the biggest loss among Group-of-10 currencies after the New Zealand dollar, as stocks slid.
"The Aussie is suffering from a more risk-averse global backdrop and a continuing weak China story," said Imre Speizer, a senior market strategist at Westpac Banking Corp in Auckland. "Risk currencies should suffer in this climate including the Aussie and kiwi."
Australia's currency fetched 70.12 US cents as of 9.02am in Tokyo from 70.19 in New York on Tuesday. The kiwi slid 0.1 per cent to 63.29 cents.
China's official Purchasing Managers' Index dropped to 49.7 for August, the weakest in three years, a report showed on Tuesday. Numbers below 50 indicate contraction. The Australian economy probably expanded 0.4 per cent in the three months ended June 30 from the first quarter, when it grew 0.9 per cent, a report on Wednesday is forecast to show, according to economists in a Bloomberg survey.
Reserve Bank of Australia Governor Glenn Stevens and his board kept the cash rate at a record-low 2 per cent on Tuesday, as predicted by markets and economists following reductions in May and February.