Bloomberg News

Aussie, N.Z. Dollars Fall on U.S. Debt-Ceiling Speculation

January 03, 2013

The Australian and New Zealand dollars fell against their U.S. peer as concern U.S. lawmakers will struggle to agree on raising the nation’s debt ceiling overshadowed a bill passed to avert the so-called fiscal cliff.

The so-called Aussie snapped a three-day increase against the greenback as officials in the world’s biggest economy turned their attention to a debate over raising the $16.4 trillion debt limit. The New Zealand currency declined as minutes of the Federal Reserve’s last meeting showed policy makers said they’ll probably end their $85 billion monthly bond purchases sometime in 2013.

“The modest pressure on risk assets like equities and commodities is reflected in the FX space, with the risky majors underperforming against the safe haven yen and dollar,” Shaun Osborne, chief currency strategist at Toronto-Dominion Bank (TD), wrote yesterday in a note to clients. “The commodity currencies, however, have held up well.”

Australia’s currency depreciated 0.4 percent to $1.0466 yesterday in New York after earlier falling to its lowest level since Dec. 21. It declined 0.5 percent to 91.33 yen.

The New Zealand dollar, nicknamed the kiwi, sank 0.7 percent to 82.81 U.S. cents. The kiwi decreased 0.9 percent to 72.24 yen.

The Standard & Poor’s GSCI Index of raw materials declined 0.4 percent and crude-oil futures slipped 0.3 percent to $92.86 per barrel in New York. The S&P 500 Index (SPX) fell 0.2 percent.

New Zealand’s dollar has strengthened 3.6 percent over the past year, the second-biggest increase among the 10 developed- nation currencies monitored by the Bloomberg Correlation- Weighted Indexes, while the Aussie has lost 1 percent. The U.S. dollar has fallen 2 percent and the yen has dropped 15 percent to lead decliners.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

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


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