BLBG: Australian, N.Z. Dollars Weaken as Investor Risk Appetite Drops
By Catarina Saraiva and Candice Zachariahs
June 4 (Bloomberg) -- The Australian and New Zealand dollars snapped two days of gains after lower-than-forecast U.S. job growth and concern that Europe’s debt crisis is expanding cut investor appetite for higher-yielding assets.
The currencies capped weekly declines as a report showed U.S. employers added fewer jobs in May than forecast. A spokesman for Hungarian Prime Minister Viktor Orban said his nation’s economy is in a “very grave situation.”
“The concern in Hungary and the spread of that contagion seems to be taking some of the risk appetite off the table,” said Dennis Cajigas, a senior market strategist at broker Lind- Waldock in Chicago. “That combined with the U.S. unemployment report is really causing a flight to quality.”
Australia’s currency weakened 2.3 percent to 82.58 U.S. cents at 12:24 p.m. in New York, from 84.48 cents yesterday. It depreciated 2.5 percent for the week. The Aussie fell 3.2 percent to 75.81 yen, from 78.32 yen yesterday.
New Zealand’s dollar fell 1.9 percent on the day and 1.1 percent for the week to 67.15 U.S. cents. The kiwi tumbled 2.9 percent today to 61.64 yen, from 63.47 yen yesterday.
The U.S. economy added 431,000 jobs in May, compared with a 536,000-position median forecast in a Bloomberg News survey. The total reflected an increase of 411,000 jobs in the government’s hiring of temporary help for the 2010 census.
Copper Demand
Demand for Australia’s currency weakened after Freeport- McMoran Copper & Gold Inc. and Codelco, the world’s two largest copper producers, said China’s plans to curb its economy threaten to reduce demand for the metal. China is Australia’s largest trading partner and New Zealand’s second-biggest export market. Commodities make up more than half of all overseas shipments for both South Pacific nations.
BHP Billiton Ltd., based in Melbourne, Australia, the world’s largest mining company, sank 2.3 percent. Posco, Asia’s biggest steelmaker by market value, lost 4.1 percent.
Societe Generale SA declined to comment on reports that cited speculation the bank may face losses on derivatives. “If we had something to say, we would have already communicated,” said Laura Schalk, a Paris-based spokeswoman.
To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net.
