Sept. 21 (Bloomberg) -- The Australian dollar pared earlier losses against the greenback as Asian stocks snapped a two-day decline, supporting demand for higher-yielding assets.
New Zealand’s dollar weakened against its U.S. and Japanese counterparts after a government report showed the country’s current account deficit widened more than economists had estimated. Losses in the Australian dollar were also limited after a private report showed the country’s leading economic indicator rose for a second month in July. The Federal Reserve concludes a two-day meeting today, amid speculation the Federal Open Market Committee will unveil additional stimulus measures.
“Risk appetite seemed to have been improved somewhat ahead of the FOMC meeting tonight,” said Janu Chan , an economist at St. George Bank Ltd. in Sydney. “It does appear that there’s some kind of support for Aussie, at least for today.”
Australia’s dollar slipped to $1.0262 at 11:15 a.m. in Sydney from $1.0276 in New York yesterday. It fell to 78.11 yen from 78.57. New Zealand’s currency weakened to 82.20 U.S. cents from 82.42. The so-called kiwi bought 62.73 yen from 63.
The MSCI Asia Pacific Index of stocks rallied 0.2 percent after declining 0.5 percent yesterday.
The Federal Open Market Committee will probably decide at the completion of its policy meeting to replace short-term Treasuries in its $1.65 trillion portfolio with longer-term debt, according to 71 percent of 42 economists surveyed by Bloomberg. The move is known as “Operation Twist” because of its goal to bend the yield curve, driving long-term yields lower relative to shorter maturities.
The Australian index, a gauge of future economic growth, gained 0.5 percent from a month earlier to 284.2, Westpac Banking Corp. and the Melbourne Institute said in a statement in Sydney today.
New Zealand’s current-account deficit was NZ$921 million ($757 million) in the second quarter, Statistics New Zealand said today. The median estimate in a Bloomberg News survey of economists was for a shortfall of NZ$671 million.
--Editors: Jonathan Annells, Naoto Hosoda
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