Retardation of the expansion in China's manufacturing, for the second month caused fall in the New Zealand dollar.

Thomas Averill, a senior consultant with a currency risk management firm at HiFX at Sydney said, "You can see the Aussie back down to 80 cents and further losses in equity markets."

At 11:15 a. m the Australian currency slipped by 0.7 percent to 83.52 U. S. cents, from 84.08,. in New York and touched the lowest level of 83.16 U. S, since June 10. The currency dropped by 2.1 percent to 72.81 yen.

New Zealand's dollar dropped to its lowest since June 10 by slipping 0.8 percent to 67.95 U. S. cents, before trading at 68.50. It fell 1.4 percent to 59.70 yen.

The Standard & Poor's 500 Index fell to a 10-month low due to drop in manufacturing 56.2 in June from 59.7 a month. In May, New home sales dropped by 30 percent.

Grace, chief currency strategist with Commonwealth Bank of Australia said, "People are trimming their U. S. dollar long positions and trimming their euro short positions and the Aussie was supported by that."

Tony Morriss, senior IR strategist with ANZ said, "They've made a strong statement that they're committed to getting to a surplus and I don't see any reason they won't do that."