The Australian Dollar Is Acting Like an Emerging-Market Currency
- Currency has tumbled almost 4% in past month, more than rupiah
- Aussie used as proxy trade for risks in region, Gibbs says
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Australia’s dollar is finding itself in unusual company these days, getting sold along with former emerging-market darlings such as the Indonesian rupiah and Indian rupee.
As a rout grips developing markets, the Aussie -- viewed as a barometer for global risk appetite -- is also bearing the brunt of investor angst. While nobody’s expecting the currency to be swept up in full-fledged contagion, it’s being battered due to the economy’s close ties to China and reliance on offshore funding.