The Australian dollar weakened against 13 of its 16 major counterparts as Europe’s debt crisis spurred a drop in shares globally, curbing demand for higher- yielding assets. The so-called Aussie held declines against the U.S. and Japanese currencies as commodity prices fell and German lawmakers prepared to vote on a European rescue fund. New Zealand’s currency strengthened versus the greenback as Reserve Bank Governor Alan Bollard said policy makers are better positioned than many peers to weather any fallout from the European and U.S. fiscal crises. “I don’t see the bounce in risk appetite being sustained,” said Jonathan Cavenagh, strategist at Westpac Banking Corp. in Singapore. “We’re still in the camp that risk aversion is going to remain quite elevated, and that should ultimately weigh on the Aussie dollar and New Zealand dollar.” The Australian dollar traded at 97.78 U.S. cents as of 1:43 p.m. in Sydney from 97.81 cents in New York yesterday. It weakened to 74.82 yen from 74.93 yen. New Zealand’s currency was at 77.78 U.S. cents from 77.67 cents and bought 59.53 yen from 59.50 yen. The MSCI Asia Pacific Index of regional shares fell 0.6 percent. The Standard & Poor’s 500 index lost 2.1 percent and the Stoxx Europe 600 Index slid 1.1 percent yesterday. Crude oil fell as much as 1.9 percent in afterhours trading on the New York Mercantile Exchange and copper on the London Metal Exchange dipped as much as 5.9 percent. The Thomson Reuters/Jefferies CRB index of raw materials declined 2.5 percent yesterday. German Vote Germany’s lower house, the Bundestag, will decide today on strengthening Europe’s temporary rescue fund, the European Financial Stability Facility. The plan before lawmakers in Berlin would allow the fund to buy bonds of distressed states and offer emergency loans to governments, raising Germany’s guarantees to 211 billion euros ($287 billion) from 123 billion euros. The so-called kiwi erased earlier losses on prospects New Zealand’s central bank is relatively better able to handle the repercussions of Europe’s debt crisis. “From a monetary policy point of view, New Zealand is in a reasonably sweet sort of spot because we can move rates when we need to,” Governor Bollard told Radio New Zealand’s Nine-to- Noon today. “We’re comfortable where things are. We think we are going to have to push them up as we get more housing sector recovery but we’ve got time to wait and watch on that.” Bollard this month held the official cash rate at a record- low 2.5 percent for a fourth-straight meeting, saying worsening global economic and financial risks made it prudent to stay on hold. To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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