Australian Dollar Falls Before Spending, Home Loans Reports

By Chris Young

Sept. 9 (Bloomberg) -- The Australian dollar fell before the government releases reports showing retail sales and home loans for July that may add to signs the economy is slowing.

The currency also declined before an industry report that will show business confidence last month. The Australian dollar, known as the Aussie, dropped as the U.S. currency gained to the highest level since October against the euro after a U.S. government takeover of Fannie Mae and Freddie Mac boosted confidence in global financial markets.

``With the U.S. dollar at an 11-month high against the euro the Australian dollar is going to struggle,'' said Tony Morriss, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. ``Maybe the data will be softer today so that will also pressure the Aussie.''

The Australian dollar slid to 81.55 U.S. cents as of 8:45 a.m. in Sydney, compared with 81.82 cents in late Asian trading yesterday. It earlier touched 80.76, near the 13-month low of 80.62 cents touched Sept. 5. It may decline to 80.80 cents today, Morriss forecast.

National Australia Bank Ltd. will release a business confidence survey for August at 11:30 a.m. in Sydney. The confidence index held at the lowest in seven years in July.

Australian home-loan approvals probably stalled in July after falling to a four-year low in June, according to the median estimate of economists surveyed by Bloomberg News. The report is also due at 11:30 a.m., the same time the government releases retail sales figures. Surveys of companies and people that are used to prepare monthly retail sales and employment reports are being reduced this month by up to two-thirds, the Australian Bureau of Statistics said July 2.

Australian government bonds gained. The yield on the 10- year bond fell 14 basis points, or 0.14 percentage point, to 5.64 percent. The price of the 5.25 percent bond maturing in March 2019 rose 1.054, or A$10.54 per A$1,000 face amount, to 96.956. Bond yields move inversely to prices.

To contact the reporter on this story: Chris Young in Sydney at cyoung12@bloomberg.net.