Australian Dollar Down on Fall in Copper Price

 
   By James Glynn 
 

        SYDNEY--The Australian dollar fell sharply in Asia on Wednesday in response to a fall in the price of copper to its lowest level in five years.
        At 0550 GMT, the Australian dollar was changing hands at US$0.8094, down from US$0.8167 late Tuesday. It fell from around US$0.8190 down to around US$0.8080 during the day.
        The three-month London Metal Exchange copper price reached a day's low of $5,353.25 a metric ton--8.6% down on Tuesday's close and a low last reached in July 2009.
        Traders said the selling was a delayed reaction to weakness in copper prices in recent days and follows months of weakness in iron-ore and oil prices.
        "The Australian dollar has not recovered from the shellacking it took courtesy of copper," said Michael Turner, a currency strategist at RBC Capital Markets, adding that attention has shifted to December's employment data on Thursday.
        A weak employment report would cement views that the central bank's next interest-rate move will be a cut, economists said. Interest-rate swap markets are pricing in at least one rate cut this year.
        According to a survey by Bloomberg, Australia's unemployment rate is expected to remain unchanged at 6.3% in December, with 5,000 new jobs likely.
        The grim mood in currency markets was not helped by news overnight that the World Bank had revised down its forecasts for global growth.
        The Washington-based development institution said it expects the global economy to expand 3% this year, up from 2.6% in 2014, but still slower than its previous forecast of 3.4% for 2015.
        The latest data showed job vacancies rose 2.6% in the three months to November from the previous three months, to a two-year high of 150,400.
        Indicators of job demand across Australia's resources-reliant economy have showed modest strength in recent months. The widely watched ANZ Bank's job-ads survey, on Monday, showed a 1.8% increase in December from November, the seventh straight month of rise.
        Still, many economists expect unemployment, currently near 12-year highs, to rise further following evidence the economy slowed last year.
        Write to James Glynn at james.glynn@wsj.com
        (END) Dow Jones Newswires

        January 14, 2015 01:48 ET (06:48 GMT)

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