By Candice Zachariahs Nov. 7 (Bloomberg) -- The Australian dollar headed for a weekly decline against the greenback and the yen after the International Monetary Fund slashed global economic growth forecasts and equities and commodities slid worldwide. The New Zealand dollar also headed for a weekly loss against the yen as a gauge reflecting expectations for stock movements and risk aversion rose by the most in two weeks. Global growth will be 2.2 percent next year, the IMF said yesterday, slashing a 3 percent projection announced a month ago. ``The global economy is slowing sharply,'' said Callum Henderson, head of foreign-exchange strategy at Standard Chartered Plc in Singapore. For Australia's dollar, ``the low at 47.75 definitely attracts on a multi-month basis.'' Australia's currency declined 1 percent to 66.19 U.S. cents as of 2:33 p.m. in Sydney from 66.79 cents in New York trading on Oct. 31. The currency fell 2.3 percent to 64.60 yen from 65.74 last week. It touched a record low of 47.75 in April 2001. New Zealand's dollar was 0.1 percent higher at 58.31 U.S. cents from 58.27 cents in New York Oct. 31. It has fallen 1.2 percent this week to 56.66 yen. The currencies slumped against the yen as the Dow Jones Industrial Average posted its worst two-day loss since 1987 after jobless claims jumped and the shrinking economy reduced earnings at companies from Blackstone Group Inc. to News Corp. Australia's benchmark stock index, the S&P/ASX 200 Index, headed 0.6 percent lower on the week. Risk Aversion The VIX volatility index, a Chicago Board Options Exchange gauge reflecting expectations for stock market price changes and a measure of investor sentiment, closed at 63.68, the highest since Oct. 29. ``The market's tight, the market's confused and we're continuing to find that positions aren't being held for a long time,'' said Glenn Wittingslow, head of foreign-exchange options at St. George Bank Ltd. in Sydney. ``The Aussie has probably held up okay allowing for what we've seen in the equity market the past few days.'' Australia's economy will grow 1.8 percent in fiscal 2009, even as the U.S., Japan and euro enter their first simultaneous recession in the post-World War II era, the IMF said. Benchmark interest rates are 5.25 percent in Australia and 6.5 percent in New Zealand, compared with 0.3 percent in Japan and 1 percent in the U.S., encouraging investors to buy the South Pacific nations' assets using money borrowed in the U.S. and Japan. The risk in such trades is that currency market moves erase profits. Australian government bonds edged higher. The yield on the benchmark 10-year note was little changed at 5.130 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 advanced 0.115, or A$1.15 per A$1,000 face amount, to 100.947. A basis point equals 0.01 percentage point. New Zealand's two-year swap rate, a fixed payment made to receive floating rates, fell to 5.93 percent today from 6.07 yesterday. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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