Wednesday, February 02, 2011

Australian Dollar Falls as Cyclone With 180 mph Winds Hits Coast

Feb. 2 (Bloomberg) -- Australia’s dollar fell from almost a one-month high as Cyclone Yasi, with winds stronger than Hurricane Katrina that hit New Orleans, reached the country’s northeast coastline.

The Aussie weakened against the greenback as thousands of people evacuated low-lying areas in the city of Cairns before Yasi makes landfall. The storm is estimated to be more powerful than a 2006 storm that wiped out most of Australia’s banana crop and devastated sugar cane fields.

“The cyclone is probably weighing on Aussie,” said Amelia Bourdeau, a currency strategist in Stamford, Connecticut, at UBS AG. “In addition to the floods in Queensland, this may be something that negatively impacts the first quarter gross domestic product in Australia.” Read More