The Australian and New Zealand dollars headed for second-straight weekly gains before Group of 20 finance ministers meet in Paris today to discuss ways to keep Europe’s debt crisis from harming global growth. The so-called Aussie and kiwi are poised to rise more than 3 percent since Oct. 7. Both weakened earlier against the yen after Standard & Poor’s cut Spain’s long-term sovereign credit rating, damping demand for higher-yielding assets. “The market would want to take a breather into G-20 on the weekend,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage. “I think the market will want to sell the euro before it sells any other currencies, so we’re buying Aussie and kiwi.” The Australian dollar was at $1.0191 as of 3:37 p.m. in Sydney, little changed from the close in New York after earlier sliding as much as 0.5 percent. It’s poised for a 4.3 percent weekly gain, the most since October 2009. The Aussie was unchanged at 78.37 yen. New Zealand’s currency was also unchanged at 79.54 U.S. cents, erasing a daily drop of 0.6 percent, and was little changed at 61.16 yen. The kiwi is set for a 3.3 percent advance this week, the most in 2011. The MSCI Asia Pacific Index dropped 0.8 percent. G-20 Response Nations from China to Brazil are considering increasing the International Monetary Fund’s lending resources to help stem the European debt crisis, Group of 20 and IMF officials said. Policy makers are discussing an expansion of the IMF’s firepower as part of a global G-20 agreement next month in Cannes, France, according to three officials, who declined to be named because the discussions are not public. Talks are in preliminary stages as potential contributors wait to see what measures Europeans take to end the debt turmoil at an Oct. 23 summit, they said. Spain’s credit rating was cut for the third time in three years by S&P, who lowered the ranking one level to AA- with a negative outlook. “I don’t think the market’s out of the woods yet,” said Thomas Averill, a director at foreign-exchange and interest-rate risk management company Rochford Capital in Sydney. “The Aussie is going to be drifting over the course of today and may get sold quite aggressively overnight.” Benchmark interest rates are 4.75 percent in Australia and 2.5 percent in New Zealand, compared with as low as zero in the U.S. and Japan, attracting investors to the South Pacific nations’ higher-yielding assets. “We have relatively high yields here in Australia, and that is something that’s attracting the international investor community with a great deal of consistency,” Russell Jones, global head of fixed-income strategy at Westpac Banking Corp., said in an interview with Bloomberg Television. To contact the reporters on this story: 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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