Bloomberg News

Australian, N.Z. Dollars Reach Lowest Since October on Outlook

November 17, 2011

Nov. 17 (Bloomberg) -- The Australian and New Zealand currencies reached the lowest levels in more than a month versus the dollar on concern the global economy will slow as European leaders struggle to stem their region’s debt crisis.

Australia’s dollar slid for a fourth straight day, the longest stretch of losses in two months, and reached parity with the greenback as global stocks and commodities sank after Spain sold bonds at the highest average yield in at least seven years. New Zealand’s dollar touched a six-week low versus the greenback and yen after producer input prices grew at slowest in almost two years. The two South Pacific currencies were the biggest losers versus the greenback.

“The near-term story is likely to get worse before it gets better in Europe,” said Gavin Stacey, chief interest-rate strategist at Barclays Plc in Sydney. “I don’t think there’s anything exciting over the near term which will turn the sentiment around and turn the performance of the Australian dollar around.”

The Aussie touched 99.85 U.S. cents, the weakest level since Oct. 12, before trading 0.9 percent weaker at 99.95 cents at 12:42 p.m. New York time. Its daily losing streak was the longest since the five days ended Sept. 14. The currency dropped 1 percent to 76.95 yen.

New Zealand’s dollar, nicknamed the kiwi, fell 1 percent to 75.83 U.S. cents, the least since Oct. 5, before trading 0.9 percent lower at 75.88 cents. It fell 0.9 percent to 58.47 yen, the lowest since Oct. 5.

Spanish Auction

Spain sold 3.56 billion euros ($4.8 billion) of a new 10- year bond at an average yield of almost 7 percent, the highest level since at least September 2004. The nation was originally seeking to raise up to 4 billion euros from the sale.

The Standard & Poor’s 500 Index fell 0.7 percent and the MSCI World Index of stocks declined 0.8 percent. The S&P GSCI Index of 24 raw materials tumbled 1.9 percent.

New Zealand’s producer input prices gained 0.6 percent in the third quarter from the three months through June, the nation’s statistics bureau said in Wellington today. That’s the smallest increase since the fourth quarter of 2009.

--With assistance from Allison Bennett in New York. Editors: Greg Storey, Dennis Fitzgerald

To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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