Aussie dollar skids, yen firms

Risk sentiment sours as US equity rally cools: analyst

A reduction in risk appetites lifted the yen on Wednesday and pressured the Australian dollar, as investors awaited US consumer inflation data later in the global session.

The Aussie was the big mover of the Asian session, skidding 0.56 percent against its US counterpart to $0.7586 at 5 pm Beijing time, brushing its lowest levels since July.

Against the yen, it tumbled 1.06 percent to 85.62 yen after falling as far as 85.67, its lowest since mid-August.

Data showed Australian wages rose only 0.5 percent in the third quarter and 2 percent for the year, falling short of 0.7 percent and 2.2 percent, respectively, and challenging the Reserve Bank of Australia’s view that wages would pick up.

Slumping equities also added to pressure. Asian stocks slipped on Wednesday after weaker crude oil prices took a toll on shares on Wall Street.

“Risk sentiment has soured somewhat in the last week or so, as the US equity rally has run out of steam,” said Ray Attrill, Sydney-based global co-head of forex strategy at the National Australia Bank.

“So you’ve had a bit of a perfect storm, with specific factors that have been supporting the yen, that have also been driving down the Aussie, which is still a very risk-sensitive currency,” he said.

The euro remained close to twoand-a-half-week highs, getting a boost from Tuesday’s upbeat German economic data. The common currency edged down slightly to $1.1797 after jumping more than 1 percent in the previous session. It moved well away from a three-and-a-half-month low of $1.1553 plumbed last week.

The euro’s ascent pushed down the dollar index, which tracks the US currency against a basket of six major rivals. It was steady on the day at 93.812, wallowing at its lowest levels since late October and well below its overnight high of 94.542.

Germany’s seasonally-adjusted gross domestic product rose 0.8 percent on the quarter, beating a Reuters poll forecast of 0.6 percent.