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Aussie Falls After Confidence Worsens, Moving Average Breached

Australia’s dollar fell below its 200-day moving average for the first time in five months after a private report showed consumer confidence worsened.

A measure of volatility reached its strongest level since February, reducing the allure of higher-yielding currencies whose profits could be erased by market moves. The greenback reached a six-year high versus the yen on speculation U.S. employment data tomorrow will back the case for theFederal Reserve to raise interest rates next year. The pound was near the lowest since November after a poll of voters in Scotland provided fresh evidence of a swing away from the U.K.

“The U.S. dollar has had a really nice rally against everything else,” said Chris Weston, chief market strategist in Melbourne at IG Australia, a unit of IG Group. “The euro and the pound are so oversold that now people are looking to a positive U.S. dollar bias against the Aussie.”

The Australian dollar dropped 0.5 percent to 91.61 U.S. cents as of 6:54 a.m. in London. The 200-day moving average was 91.82. The Aussie will probably drop to 90 cents if it closes below 92 for the first time since March, IG’s Weston said.

The dollar added 0.3 percent to 106.46 yen, after touching 106.56, the highest since September 2008. The greenback traded at $1.2928 per euro from $1.2937 in New York, after reaching $1.2860 yesterday, the strongest since July 2013. The shared currency advanced 0.2 percent to 137.61 yen.

The Bloomberg Dollar Spot Index, which tracks the greenback against a basket of 10 leading currencies, added 0.2 percent to 1,047.46 from yesterday, when it touched 1,048.84, the most since July 2013.

Deutsche Bank AG’s Currency Volatility Index jumped to 7.70 percent, the highest since Feb. 14.

Consumer Confidence

In Australia, the consumer confidence index for September fell 4.6 percent to 94 from the previous month, a Westpac Banking Corp. and Melbourne Institute survey showed today in Sydney. A figure below 100 indicates pessimists outnumber optimists.

First-time applications for U.S. unemployment benefits fell by 2,000 to 300,000 in the week ended Sept. 6, according to the median estimate of economists surveyed by Bloomberg News before the Labor Department report tomorrow.

Rate Watch

The Fed, which meets Sept. 16-17, is considering the timing of its first rate increase since 2006. It has held the benchmark interest-rate target in a range of zero to 0.25 percent since 2008 to support the economy.

There’s a 59 percent chance the Fed will raise the target to at least 0.5 percent by July 2015, futures trading shows. The likelihood was 52 percent at the start of this month.

“The Fed is likely to raise rates by mid-2015, while other countries like Japan are forced to still ease,” said Kazuo Shirai, a trader at Union Bank NA in Los Angeles. “The dollar will be bought as the U.S. is likely to be the sole winner.”

In Scotland, 38 percent of respondents said they’d vote Yes to independence in the Sept. 18 ballot, up from 32 percent, a monthly poll by TNS found. That compares with 39 percent who said they favored the status quo, down from 45 percent. The No campaign’s lead of one percentage point is down from 13 points last month, TNS said. Another 23 percent of respondents said they have yet to make up their minds.

The pound rallied 0.1 percent to $1.6126, after falling to $1.6060 yesterday, the weakest since Nov. 19.

A gauge of momentum known as the 14-day relative-strength index for the dollar against the euro was at 77, above the 70 level that suggests to some traders that an asset has risen too far, too fast. The measure climbed to 84 on Sept. 8, the most overbought since 2008.

“The U.S. dollar has rallied quite steeply this month, and it’s only just tapered off a little bit,” said Sean Callow, a strategist at Westpac Banking Corp. in Sydney. “I wouldn’t be making anything really of a slight dip in U.S. dollar on the day. I think it’s in pretty good shape right now.”