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The Australian dollar fell on Monday as investors avoided risker assets after a run of bad news, including Greece's festering fiscal woes and surprisingly large credit losses at J.P. Morgan. The Aussie slid to $0.9212, from $0.9268 seen here late Friday. Support is seen around $0.9170, and a break there would be bearish for a sharper decline towards $0.9120.

Against the yen, it was down at 83.81, from Friday's 84.48. It did not gain ground even against a weaker euro, slipping to 0.6409 euros, from Friday's 0.6430. "Concerns over Greece weighed on the euro and could remain in the spotlight this week," Credit Suisse said in a note to clients.

But the bank said it did not think credit problems in Greece would force the European Central Bank to delay policy tightening, or lead reserve managers to flee the common currency. Worries about Greece defaulting on its government debt were revived amid reports the Euro zone is increasingly impatient with the country. It was reported last week Greece had for years deliberately understated its budget deficit.

Any sign of anger in the Euro zone against Greece unsettles investors as some are betting the European Union will step in to rescue Greece if it falls on the brink of default. Underscoring the fragile mood in markets, Asian stocks mostly fell, weighed by J.P. Morgan's quarterly results on Friday which showed the US bank suffered surprisingly sharp mortgage and credit card loan losses.

The nervous mood kept US Treasuries well supported. Australian bond futures rose too. Three-year bond futures added 0.04 points to 94.87, and the ten-year contract jumped 0.065 points to 94.40. Yet, despite Monday's weakness, the underlying sentiment on the Aussie remained strong. The latest data from the Commodity Futures Trading Commission showed currency speculators raised their net long positions on the Aussie to 59,352 in the week ending December 1, from 47,108 the previous week. That is the second-highest net long positions held by currency speculators, after the Mexican peso.

Copyright Reuters, 2010


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