The Australian dollar fell sharply today after China announced a tightening of controls on high-yielding financial products that form a key part of the country's shadow-banking system.
Traders said the announcement highlighted risks that might be posed to China's financial system, with the country's state-run banks in recent days reporting huge exposures to the wealth management products in question.
China is Australia's biggest trading partner, and the Australian dollar is often traded by global investment firms as a more liquid proxy to the yuan.
At 0530 GMT, the Aussie was buying US$1.0427 compared with US$1.0467 late in Sydney trading Wednesday. It traded as high as US$1.0458 in early Asian trading.
The fall in the Australian dollar mirrored falls in Asian share prices, with Chinese shares experiencing their biggest one-day fall in nearly a month.