Rates At 0520 GMT Latest Change AUD/USD 0.9916 -0.64% AUD/JPY 77.29 -0.61% 6.50% May, 2013 3.1505% -0.0514 4.50% Mar, 2020 3.6282% -0.0576 10-Yr Spread To U.S. +194 bps +11 bps SFE Mar 3-Year Futures 97.06 +0.06 SFE Mar 10-Year Futures 96.23 +0.055 SYDNEY (Dow Jones)--The Australian dollar was weaker Monday on news that North Korean Leader Kim Jong Il had died, stirring up uncertainty about the future leadership of the nuclear state and spreading tension across the region. Korean stocks were weaker on the news as the South Korean government moved to a heightened military stance. Australia's Foreign Minister Kevin Rudd warned of potential instability in the region while uncertainty continues about who will lead North Korea into the future. Still, currency traders said it was one more source of uncertainty for markets already rattled by events in Europe and actions by key ratings agencies. Fitch Ratings Friday placed six euro-zone nations including Spain and Italy on watch for downgrades after it concluded a "comprehensive solution" to the region's debt crisis is "technically and politically beyond reach." Moody's Investors Service also downgraded Belgium two notches. News of Kim Jong Il's death is "just the latest addition to a long list of reasons to cut exposure to risk," said David Scutt, a trader at Arab Bank. Scutt expects instability in the region to cap any rallies in the Australian dollar in the remaining weeks of the year. "It looks like the Santa Claus rally will suffer the same fate as the dear leader," he added. Currency investors are expected to gravitate toward the U.S. dollar in coming days, said Tim Waterer, senior trader at CMC Markets. "Financial markets do not take well to headlines regarding militaries being placed on high alert," he said. "So I expect that higher yielding currencies may be facing a slightly steeper uphill battle in the coming days." At 0520 GMT, the Australian dollar was trading at US$0.9916, down from US$0.9980 late Friday. It traded as low as US$0.9896 after the news of Kim's death. Against the Japanese yen, the Australian dollar changed hands at Y77.29, down from Y77.763. Tuesday will bring the only major local economic event of the week, with the Reserve Bank of Australia set to publish minutes of its Dec. 6 policy meeting. The RBA surprised a good deal of the market with its decision to lower its cash rate target a further 25 basis points to 4.25%. economists said with the next policy meeting not scheduled until February, it is unlikely the minutes will signal much. "Facing such uncertainty, and with the next board meeting seven weeks away, it makes little tactical sense for officials to do anything but convey flexibility," said Stephen Walters, chief economist at JPMorgan. -By James Glynn, Dow Jones Newswires; 61-2-8272-4685; james.glynn@dowjones.com (Data provided by Reuters)

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