Bloomberg News

Aussie, N.Z. Dollars Fall as Greek Crisis Damps Yield Appetite

June 25, 2011

June 24 (Bloomberg) -- The Australian dollar fell to within half a cent of a one-month low versus its U.S. counterpart as concern that a Greek austerity plan won’t resolve Europe’s sovereign-debt crisis damped appetite for higher yields.

The New Zealand dollar capped a second weekly loss, its first back-to-back five-day decline in more than a month, and the Aussie fell for the week. Stocks and commodities declined as Greek Prime Minister George Papandreou prepared for a vote in parliament next week on budget cuts and asset sales needed to secure funding from the European Union and the International Monetary Fund and keep Greece from defaulting on its debt.

“Anything that starts with a “G” I’ll be paying attention to,” said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York. “Developments in Greece are really what the market’s all about right now, including Australia.”

The Australian dollar weakened 0.2 percent to $1.0503 at 2:55 p.m. in New York, from $1.0523 yesterday, when it touched $1.0455, the lowest since May 25. It tumbled 1.1 percent on the week. The Aussie slipped 0.2 percent to 84.53 yen, from 84.72.

New Zealand’s dollar, nicknamed the kiwi, fell 0.4 percent to 81.06 U.S. cents, from 81.39 cents yesterday. It declined 0.3 percent on the week. The kiwi depreciated 0.5 percent to 65.21 yen, from 65.53 yesterday.

The Aussie tempered its losses as a central-bank official said the country’s biggest mining boom in a century risks accelerating inflation.

“We are looking at a significant boom in investment in the resources sector at a time when the overall economy has relatively little spare capacity,” Reserve Bank of Australia Assistant Governor Philip Lowe said in a speech at a BankSA Trends forum in Adelaide, Australia. He didn’t specifically address monetary policy.

RBA Governor Glenn Stevens held the benchmark rate at 4.75 percent this month for a sixth straight meeting.

--With assistance from Catarina Saraiva in New York and Yoshiaki Nohara in Tokyo. Editors: Greg Storey, Dave Liedtka To contact the reporter on this story: Joe Ragazzo in New York at

To contact the editor responsible for this story: Dave Liedtka at

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