The Australian dollar fell to its lowest level in 10 weeks as traders sold higher-yielding assets before year-end. Australia’s dollar also declined as investors raised bets that the central bank will raise interest rates, damping demand for the nation’s assets.

Australia’s currency fell 1.2 percent to 88.98 U.S. cents as of 4:09 p.m. in Sydney from 90.07 cents in New York yesterday. It touched 88.75, the least since Oct. 7. The currency declined 0.8 percent to 80.21 yen.

Declines in Australia’s dollar may be limited on speculation its 3 percent drop versus the U.S. currency over the past five days is overdone. The so-called Aussie has been the worst-performing currency against the greenback among its 16 most-traded counterparts over that period.

Economists believe that this is a temporary weakness we’re seeing in the Aussie dollar and looking for rates to go higher.

A simillar scenario is the New Zealand’s dollar, which slid 1.1 percent to 71.24 U.S. cents from 72.06 cents yesterday. It bought 64.21 yen from 64.68 yen. New Zealand’s dollar has slid for a third day.

Benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.

New Zealand’s currency also weakened as a survey showed consumer confidence fell in the fourth quarter. The household sentiment index declined to 116.9 from a four-year high of 120.3 in the third quarter. A reading above 100 indicates optimists outnumber pessimists.

No investor is really prepared to take any new risk positions prior to the Christmas period.