Rates At 0530 GMT Latest Change AUD/USD 0.9935 -0.35% AUD/JPY 76.20 -0.23% 6.50% May, 2012 3.7446% -0.0404 4.50% Mar, 2020 0.0279% -0.0279 10-Yr Spread To U.S. +221 bps +3 bps SFE Dec 3-Year Futures 96.31 +0.03 SFE Dec 10-Year Futures 95.66 +0.02 SYDNEY (Dow Jones)--The Australian dollar was lower Wednesday as trade tensions between the U.S. and China continued to rise and concerns grew about faltering efforts to boost confidence in the euro-zone. China's yuan fell to the lower limit of its trading band against the U.S. dollar Wednesday, signaling China's displeasure with a U.S. bill targeting Beijing's management of its currency. China's central bank set its currency lower following a U.S. Senate vote to pass legislation intended to force the White House to be more aggressive in seeking penalties against countries with "misaligned" currencies. "A trade war is the last thing we need right now. On top of a European banking crisis, a U.S. fiscal crisis, does the world really need a U.S.-China trade crisis?" said Robert Rennie, head of currency strategy at Westpac. The Australian dollar was caught up in the spat as traders view it as a liquid proxy for the yuan. Australia's growing trade links with China add to the case to sell it when the China authorities are lowering their currency. The U.S. has long called for a higher yuan to reflect China's emergence as a global economic powerhouse. Earlier, confidence was also rocked by news Slovakia's parliament rejected an expansion of the euro-zone bailout fund, dealing a setback to European leaders' campaign to avert a deepening of the region's sovereign debt woes. But Slovakian lawmakers say the body will ultimately approve the changes, perhaps as early as Wednesday, which might explain why the euro is still hovering around two-week highs despite the blow. "It has given traders an excuse to take risk off the table," said Tim Waterer, trader at CMC Markets. "The Slovak vote didn't go the way traders had wanted, and really that is the first piece of bad news we have had all week," he added. At 0530 GMT, the Australian dollar was at US$0.9935, down from US$0.9970 late Tuesday after briefly touching a high of US$1.0009 on the session. Against the Japanese yen, the currency changed hands at Y76.20, down from Y76.41. The next hurdle for the Australian dollar will be September employment data due Thursday. A survey of 20 economists by Dow Jones Newswires on Friday showed an expected rise in employment of 10,000 in September from August, with unemployment to remain at 5.3%. The data will be published at 0030 GMT by the Australian Bureau of Statistics. -By James Glynn, Dow Jones Newswires; 61-2-8272-4685; james.glynn@dowjones.com

Source