Australian dollar drops to one-week low

The Australian dollar fell to a one-week low against the US dollar on Wednesday after investors dumped high-yielding currencies and assets as growing risk aversion enveloped global markets.
The Aussie lost ground against the Japanese yen to fall to its lowest since June 15 as risky carry trade positions were unwound with investors fretting about whether the troubles in the US subprime mortgage market woes would spill over to the broader economy.
"Equity and commodity markets across the region have fallen due to further risk aversion and concerns about the US economy," said Jonathan Cavenagh, economist at Westpac Banking Group.
The Australian dollar was at $0.8407/12 against the US dollar, down 0.8 percent from $0.8472/8476 here late on Tuesday. It had struck an 18-year high of $0.8512 in offshore trade.