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Aussie Drops for Third Session with Capital Spending

February 27, 2014 at 6:05 by Vladimir Vyun

Reverend John Flynn on Australian 20-dollar billThe Australian dollar extended its drop to the third consecutive session today as capital spending fell more than was expected, hurting the traders’ sentiment that was already sour due to concerns about signs of economic slowdown in China.

Total new capital expenditures were down 5.7 percent in the fourth quarter of 2013 from a year ago, while economists have counted on a drop by just 1.0 percent. The previous quarter’s growth was revised from 3.6 percent to 2.6 percent. Specialists think that the mining peak in Australia has passed and the country’s economic performance should become weaker now.

China’s central bank is attempting to rein the rally of the yuan. It bodes ill for the global economy as it hurts imports in the Asian nation, which is the major trading partner for most regions in the world, including Europe.

AUD/USD was down from 0.8966 to 0.8940 and AUD/JPY declined from 91.78 to 91.50 as of 6:02 GMT today. EUR/AUD advanced from 1.5258 to 1.5306.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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