The Australian and New Zealand dollars weakened versus the yen after a wider-than-estimated budget gap in Greece increased prospects the nation will accept a bailout and damped demand for higher-yielding assets.
The dollar rose for a second day after retail sales gained more than forecast last month, adding to speculation the Federal Reserve will move to trim its $85 billion of monthly asset purchases at a meeting next week.
Australia’s dollar declined for a third day against its U.S. counterpart on concern the South Pacific nation’s economy is slowing and may be in store for further interest-rate cuts by the central bank.
Australia’s dollar rose, paring its biggest annual slide since 2008, as investors eased bets on further declines in the currency, which has trailed only the yen as the worst performer among major peers this year.
Australia’s dollar rose to a two- year high after Reserve Bank Governor Glenn Stevens signaled policy makers may need to resume raising interest rates should a mining boom stoke the economy next year and boost inflation.