The local share market has fallen for its third straight day amid a stalemate in the US debt ceiling talks.
The benchmark S&P/ASX200 on Wednesday closed down 46.1 points, or 0.63 per cent, to a five-day low of 7,213.8.
The broader All Ordinaries dropped 54.5 points, or 0.73 per cent, to 7,392.9.
Corpay APAC currency strategist Peter Dragicevich wrote in a note that markets were getting skittish as negotiations between US House Speaker Kevin McCarthy and President Joe Biden continued with no sign of an imminent resolution.
The US is expected to run out of statutory authority to pay its bills on or about June 1 on what's being referred to as the X-date.
"The longer the negotiations drag out and the closer the 'X-date' becomes, the higher anxiety levels (and volatility) are likely to go, and this is typically a negative for risk assets and currencies," Mr Dragicevich wrote.
Also overnight, Purchasing Managers Index data showed manufacturing activity down in the US and the UK, while service activity remained robust.
Across the ditch, the Reserve Bank of New Zealand at midday lifted the country's official cash rate by 25 basis points to 5.5 per cent in a 5-2 vote, with the minority wanting to keep rates on hold.
It was seen as a "dovish hike" by one of the most hawkish central banks globally, with the RBNZ forecasting it was finally done hiking rates and would begin cutting them by the third quarter of next year.
Six of the ASX's 11 official sectors finished lower, with materials the biggest loser, falling 1.7 per cent following a drop in iron ore futures amid a slowdown in Chinese steel production.
BHP dropped 2.2 per cent to $42.82, Fortescue fell 4.1 per cent to $19.62, and Rio Tinto retreated 2.1 per cent to $107.06.
Gold miners were mixed as the price of the precious metal hovered about $US1,975 an ounce.
Newcrest was up 0.6 per cent, but Evolution dipped 0.5 per cent and Northern Star was down 0.1 per cent.
In the banking sector, CBA gained 0.5 per cent to $99.93 as the country's biggest bank announced it would next month launch a new version of its popular CommBank app.
The new version will allow the app's 7.7 million active users to trade Australian shares through CommSec and offer them an individually tailored home screen, CBA said.
As for the rest of the Big Four, NAB dropped 0.2 per cent to $26.61, Westpac fell 0.1 per cent to $21.23 and ANZ was basically flat at $23.96.
Webjet was the second-best gainer among the ASX200, climbing 3.8 per cent to a more than three-year high of $7.58 after the travel platform announced it had swung from a $15 million loss last fiscal year to a $134.8m operating profit for 2022/23.
Managing director John Guscic said while travel had yet to fully return to what it was before COVID-19 hit, the group's bookings, total transaction value and operating earnings were all ahead of pre-pandemic levels.
Universal Store Holdings had plunged 27.5 per cent to $3 after the youth casual apparel retailer, which owns the THRILLS and Worship brands, said it was on track to deliver record full-year sales growth but trading conditions had deteriorated in April and May.
There were "increasingly clear signs that the youth customer is seeing pressures on their discretionary spending levels", the Queensland-based company said.
Back in the mining sector, Rubix Resources soared 50 per cent to 27c after the junior explorer announced it was acquiring a lithium project in the James Bay region of Quebec, Canada, amid continued enthusiasm for the battery metal.
The Australian dollar was buying 65.72 US cents, from 66.48 US cents at Tuesday's ASX close.
The Aussie had hit a nine-day high against the New Zealand dollar, which dropped following the RBNZ's announcement.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Wednesday down 46.1 points, or 0.63 per cent, at 7,213.8.
* The broader All Ordinaries dropped 54.5 points, or 0.73 per cent, to 7,392.9.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.72 US cents, from 66.48 US cents at Tuesday's ASX close
* 91.26 Japanese yen, from 92.05 Japanese yen
* 61.07 Euro cents, from 61.50 Euro cents
* 52.84 British pence, from 53.48 British pence
* 107.18 NZ cents, from 105.95 NZ cents
