Mellie
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http://www.bloomberg.com/apps/news?pid=10000081&sid=au1VvHeR8w5E&refer=australia
Australian Dollar Falls on Concern Over Bird Flu in Indonesia
May 24 (Bloomberg) -- The Australian dollar weakened after the World Health Organization said seven Indonesians may have contracted bird flu from other people, encouraging investors to take money out of the region.
The currency fell from its highest this week after the WHO reported the cases yesterday and said six of those infected had died. Fear of a human spread of the virus is growing, in part because it is so lethal to people. The disease has killed two- thirds of those confirmed to be infected this year. An outbreak could threaten global economic growth.
``We're gripped by risk aversion, which is certainly not a good environment for the Australian dollar,'' said Robert Rennie, chief currency strategist at Westpac Banking Corp. in Sydney.
Australia's currency fell to 75.25 U.S. cents as of 12:39 p.m. in Sydney from 75.46 cents in late Asian trading yesterday.
Almost all the cases of H5N1 infections confirmed by the agency since late 2003 can be traced to direct contact with sick or dead birds.
The WHO report increased demand for assets that are perceived as safe in times of uncertainty, such as U.S. Treasuries, which yesterday rose for a fourth day.
World Bank President Paul Wolfowitz in October said there would be ``severe'' economic costs if bird flu becomes transferable between humans.
`Smashed'
``Because Indonesia is in the same region as Australia, and the Australian dollar is a liquid currency, it's the currency that's getting smashed,'' said Stephen Koukoulas, chief Asia- Pacific strategist at TD Securities Ltd. in Sydney.
The Australian dollar earlier reached 75.94 cents as the price of commodities the country sells abroad rebounded for a second day. Copper climbed 12 percent in London, the most ever. Gold had its biggest gain in two weeks in New York.
Exports of raw materials contribute about 10 percent to Australia's economy.
``The Australian dollar was sitting on its highs and was vulnerable to any adverse news,'' said Adrian Foster, a currency strategist at Dresdner Kleinwort Wasserstein in Singapore. Bird flu ``was the straw that broke its back.''
Australian government bonds were little changed. The yield on the 10-year bond was steady at 5.68 percent. The price of the 6 percent bond maturing in February 2017 rose 0.038, or 38 cents per A$1,000 face amount, to 102.532. Bond yields move inversely to price.
Australian Dollar Falls on Concern Over Bird Flu in Indonesia
May 24 (Bloomberg) -- The Australian dollar weakened after the World Health Organization said seven Indonesians may have contracted bird flu from other people, encouraging investors to take money out of the region.
The currency fell from its highest this week after the WHO reported the cases yesterday and said six of those infected had died. Fear of a human spread of the virus is growing, in part because it is so lethal to people. The disease has killed two- thirds of those confirmed to be infected this year. An outbreak could threaten global economic growth.
``We're gripped by risk aversion, which is certainly not a good environment for the Australian dollar,'' said Robert Rennie, chief currency strategist at Westpac Banking Corp. in Sydney.
Australia's currency fell to 75.25 U.S. cents as of 12:39 p.m. in Sydney from 75.46 cents in late Asian trading yesterday.
Almost all the cases of H5N1 infections confirmed by the agency since late 2003 can be traced to direct contact with sick or dead birds.
The WHO report increased demand for assets that are perceived as safe in times of uncertainty, such as U.S. Treasuries, which yesterday rose for a fourth day.
World Bank President Paul Wolfowitz in October said there would be ``severe'' economic costs if bird flu becomes transferable between humans.
`Smashed'
``Because Indonesia is in the same region as Australia, and the Australian dollar is a liquid currency, it's the currency that's getting smashed,'' said Stephen Koukoulas, chief Asia- Pacific strategist at TD Securities Ltd. in Sydney.
The Australian dollar earlier reached 75.94 cents as the price of commodities the country sells abroad rebounded for a second day. Copper climbed 12 percent in London, the most ever. Gold had its biggest gain in two weeks in New York.
Exports of raw materials contribute about 10 percent to Australia's economy.
``The Australian dollar was sitting on its highs and was vulnerable to any adverse news,'' said Adrian Foster, a currency strategist at Dresdner Kleinwort Wasserstein in Singapore. Bird flu ``was the straw that broke its back.''
Australian government bonds were little changed. The yield on the 10-year bond was steady at 5.68 percent. The price of the 6 percent bond maturing in February 2017 rose 0.038, or 38 cents per A$1,000 face amount, to 102.532. Bond yields move inversely to price.