The Australian dollar fell against the greenback for a second day after the Federal Reserve signaled it wouldn’t add to record stimulus even after growth slowed, spurring declines in shares and higher-yielding assets. The so-called Aussie dropped after the Fed reiterated that it will complete the second round of quantitative easing, or so- called QE2, this month and maintain existing stimulus to support a flagging recovery. New Zealand’s dollar gained against all of its 16 most-traded peers after the government offered to buy thousands of homes damaged by Christchurch’s earthquakes. “Some in the market had expected the Fed to mention a QE3, but it didn’t happen, pushing down stocks and causing the dollar to be bought back,” said Nobuhiko Akai, senior manager of the foreign-exchange trading department in Tokyo at Bank of Tokyo- Mitsubishi UFJ Ltd. “As commodities and stocks fall, the Aussie seems to be becoming top-heavy.” Australia’s dollar fell to $1.0549 at 3:56 p.m. in Sydney from $1.0575 in New York yesterday. The Aussie was at 84.81 yen from 84.90 yen. New Zealand’s dollar traded at 81.63 U.S. cents from 81.46 cents, and it rose to 65.61 yen from 65.41 yen. Fed governors and regional-bank presidents now say the U.S. economy will expand by a range of 2.7 percent to 2.9 percent this year, down from April’s forecasts of 3.1 percent to 3.3 percent, based on the median range of projections. Stocks, Commodities “The U.S. Federal Reserve didn’t signal any chance of another round of quantitative easing,” analysts at National Australia Bank Ltd. led by John Kyriakopoulos, head of currency strategy in Sydney, wrote in a research note today. That “knocked stocks lower” and pushed the Australian dollar down against the U.S. currency, they wrote. The MSCI Asia Pacific Index of regional shares fell as much as 0.9 percent after the Standard & Poor’s 500 Index lost 0.7 percent yesterday. The Reuters/Jefferies CRB Index of raw materials slid 0.1 percent yesterday, snapping a two-day gain. New Zealand’s government offered to buy about 5,000 quake- damaged homes in Christchurch as part of a recovery package that will see parts of the South Island city’s eastern suburbs disappear. Officials today released a map of Christchurch showing a residential “red zone” that is unlikely to be rebuilt on for “a considerable period of time,” Prime Minister John Key said in an e-mailed statement. The government offered to buy the properties in that zone from insured owners, which will cost as much as NZ$635 million ($518.5 million), the statement said. “The market thinks this is ambiguously positive for the kiwi, but it may not be the case," said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. "These homeowners may choose to cash up and leave the country because it’s simply difficult to stay in this situation.” The yield on Australia’s 10-year government note fell two basis points to 5.11 percent, according to data compiled by Bloomberg. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose to 3.36 percent from 3.33 percent. To contact the reporter on this story： Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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