Dollar sags versus yen after Japan warning; Aussie slides on China data
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The dollar languished below the psychological 140 yen level on Wednesday after getting knocked back from a six-month high after Japanese officials met on Tuesday to discuss their currency.
The Australian dollar rode a rollercoaster after it jumped on heated local inflation data only to be dragged lower moments later by more signs of a slowdown in China, a major trading partner. The Chinese yuan slumped to a six-month low in offshore trading.
The Aussie was last down 0.15% at $0.6507, heading back toward last week's 6 1/2-month low of $0.6490. It sank as much as 0.38% at its lowest point, immediately after climbing as much as 0.33%.
"We have to remember that the Aussie is a pro-growth currency, strongly linked to the outlook for commodities, and we've seen commodities under pressure of late," said Rodrigo Catril, senior foreign-exchange strategist at National Australia Bank.
"The lack of positive news coming from economic activity in China is exacerbating that view, and proving to be the dominant one," trumping increased likelihood for further Reserve Bank of Australia tightening "sooner rather than later" following a hotter-than-expected consumer price reading, he said.
The New Zealand dollar sank as much as 0.5% to a 6 1/2-month trough at $0.60125.
