Australian Dollar Falls

The Australian dollar fell as a decline in stocks prompted investors to sell higher-yielding assets funded with loans from Japan., Bloomberg 3/30/2008 6:20:53 PM

The currency dropped for a second day against the yen and third versus the dollar after U.S. shares slid on concern financial company earnings will decline. Australia's dollar is headed for its third quarterly loss against the yen and steepest since 2001 as investors favored lower-yielding currencies.

The Australian dollar fell to 91.66 U.S. cents as of 8:55 a.m. in Sydney, compared with 91.74 cents in late New York on March 28, paring its advance this quarter to 4.7 percent. The currency traded at 90.62 yen from 91.03 yen and has fallen 7.2 percent in the three months to March 31.

Investors were less enthusiastic for so-called carry trades as the Standard & Poor's 500 Index lost 1.1 percent last week.

The Australian dollar is a favorite of carry trades because the nation's interest-rate is at an almost 12-year high of 7.25 percent. That compares with 0.5 percent in Japan.

Australian Dollar Falls