Oct. 14 (Bloomberg) -- The Australian and New Zealand dollars extended their second straight weekly gains on increased demand for higher-yielding assets as Group of 20 finance ministers met to prevent Europe’s debt crisis from slowing global growth.
The Aussie had its biggest five-day rally versus its U.S. counterpart in almost three years. Both South Pacific currencies fell earlier today against the yen after Standard & Poor’s cut Spain’s credit rating.
“The market will want to sell the euro before it sells any other currencies, so we’re buying Aussie and kiwi,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage.
Australia’s dollar rose 1.3 percent to $1.0325 at 2:41 p.m. New York time and surged 5.7 percent this week, the most since February 2009. The Aussie rose 1.7 percent to 79.72 yen after earlier dropping as much as 0.4 percent. New Zealand’s currency advanced 1.1 percent to 80.42 U.S. cents, appreciating 4.4 percent this week. It gained 1.5 percent to 62.09 yen after earlier dropping 0.6 percent.
The MSCI World index of equities rose 1.2 percent. The S&P 500 Index advanced 1.1 percent.
European officials were discussing the evolving strategy to contain debt turmoil at this weekend’s Group of 20 meeting in Paris with global financial leaders including U.S. Treasury Secretary Timothy F. Geithner.
Spain’s credit rating was cut for the third time in three years by S&P, which lowered the ranking one level to AA- with a negative outlook.
--With assistance from Monami Yui in Tokyo and Catarina Saraiva in New York. Editors: Dennis Fitzgerald, Greg Storey
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