BLBG: Australian, N.Z. Dollars Fall Before U.S. Stimulus Package Vote
The Australian and New Zealand dollars fell, reversing a gain, on speculation traders scaled back expectations the U.S. Congress will pass President Barack Obama’s economic stimulus package.
The currencies snapped a two-day advance as a delay in the announcement of U.S. Treasury Secretary Timothy Geithner’s bank rescue-plans also damped appetite for higher-yielding assets. Japanese machinery orders declined for a third month, increasing the odds of a prolonged recession in one of Australia’s biggest trading partners.
“The market is taking back some gains on concerns that it may have gotten ahead of itself over the U.S. stimulus package,” said David Forrester, currency economist at Barclays Capital in Singapore. “The market is also a little nervous over the delay in Geithner’s bank rescue measure announcement.”
The Australian dollar dropped 1 percent to 66.81 U.S. cents as of 3:11 p.m. in Sydney from late on Feb. 6 in New York. It weakened 1.5 percent to 61.13 yen. The New Zealand dollar slid 0.9 percent to 52.68 U.S. cents and declined 1.3 percent to 48.21 yen.
The U.S. Senate votes on the $780 billion economic-stimulus package today and officials will be consulting with senators throughout the day, the Treasury said in an e-mailed statement. Geithner has postponed to tomorrow his unveiling of the administration’s plan to shore up the financial industry as officials focus on getting approval for their separate economic stimulus plan in the Senate, the Treasury said.
Machine Orders
Japanese orders for machinery fell 1.7 percent in December from the previous month, when they dropped 16.2 percent, the Cabinet Office said today in Tokyo. Japan’s current-account surplus narrowed 92 percent in December as exports slumped, the Finance Ministry said today.
“The machinery orders surprised a little bit to the upside although the trade balance is a little worse than expected and that’s adding to the bad news on the global economic scenario,” Forrester said. “The economic data is saying yes, things are bad. But foreign exchange markets will be focused on policy initiatives to see how long we will be in this global downturn.”
