Sunday, July 29, 2007

Australia's Dollar Declines as Investors Shun Higher-Yielding Securities

(Bloomberg) -- The Australian dollar fell to the
weakest in a month against the U.S. currency and a two-month low
versus the yen as a slide in stocks eroded investor confidence to
buy higher-yielding assets with loans from Japan.

The currency fell for a third day as a 4.2 percent loss in
the Dow Jones Industrial Average last week led a worldwide slump
in shares. The local dollar this month reached an 18-year high
against its U.S. counterpart and the strongest in 16 years versus
the yen as rising equities encouraged investors to put on so-
called carry trades, in which they take advantage of Australia's
higher interest rates with borrowed money from Japan.


Read more at Bloomberg Currencies News

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