SYDNEY/WELLINGTON: The Australian dollar sagged to its lowest in over two months against the yen on Wednesday as a sudden dive in copper prices spooked a market already worried about persistent weakness in oil.
After a fairly steady start, the commodity-sensitive Aussie turned tail as a wave of stop-loss selling pushed London copper to a 5-1/2-year low. The industrial metal is often considered a barometer of global demand.
The Aussie shed 1.1 percent against the safe-haven yen to a 2-1/2 month trough of 95.14. It fell 0.7 percent against the greenback to $0.8110, pulling further away from a near one-month high of $0.8254 set on Monday.
The Aussie was also softer against the euro, which climbed to A$1.4510 and away from an early low of A$1.4377.
"When you see commodities come off like that, the Aussie was always going to find itself under pressure, and that is what has happened today," said Michael Turner, fixed income and currency strategist at RBC.
Australia is a major exporter of resources, including copper. Concerns about the global economy, and in particular a slowdown in China - Australia's major export market - have weighed on the Aussie in recent months.
The New Zealand dollar followed and slipped to a session low of $0.7705, well off a one-month high of $0.7866 seen at the start of the week.
New Zealand government bonds edged up, pushing yields slightly lower.
Australian government bond futures gave up just a little of their recent hefty gains. The three-year bond contract eased 1 tick to 97.940, as did the 10-year contract to 97.425.
The pause in the bond market rally nudged the 10-year cash yield up to 2.642 percent, from an all-time low of 2.623 percent touched on Tuesday.
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