BLBG:Australian, New Zealand Dollars Fall on Europe, Before China Growth Data
The Australian and New Zealand dollars fell versus the U.S. currency and yen before a report tomorrow forecast to show China’s economy grew the least in 10 quarters in the last three months of 2011.
Both currencies weakened as Asian stocks dropped after Standard & Poor’s lowered the credit ratings of nine euro-zone nations, increasing concern Europe’s worsening debt crisis will hurt the global economy. Australia’s currency maintained its decline even after a statistics bureau report showed home loans rose in November by more than economists had forecast.
“A weaker-than-expected number would likely see a bit of pressure on the Aussie dollar,” said Jeremy Jukes, a foreign- exchange dealer in Auckland at Velocity Trade Ltd., a currency brokerage, referring to China’s economic output. “A drop in GDP is probably not going to do the Aussie too many favors as China is Australia’s largest trading partner.”
Australia’s dollar weakened 0.6 percent to $1.0257 as of 12:46 p.m. in Sydney. It fell 0.8 percent to 78.83 yen. New Zealand’s dollar declined 0.3 percent to 79.21 U.S. cents and was 0.5 percent lower at 60.88 yen.
Chinese gross domestic product, the value of all goods and services produced, rose 8.7 percent from a year earlier, the slowest pace since the second quarter of 2009, according to the median forecast of economists surveyed by Bloomberg News. The data, and indicators for investment, retail sales and industrial production, are scheduled for release tomorrow in Beijing.
Stocks Decline
The MSCI Asia-Pacific (MXAP) Index of regional stocks fell 1 percent as investors sold higher-yielding assets amid concern Europe’s sovereign-debt crisis will escalate.
France and Austria lost their top credit ratings in the string of downgrades on Jan. 13 that left Germany with the euro area’s only stable AAA grade. S&P warned that crisis-fighting efforts are still falling short.
While Finland, the Netherlands and Luxembourg kept their AAA grades, they were put on negative outlook. Spain and Italy were also among the nine nations downgraded.
“The fallout from Europe will guide currency markets, but I think the carnage in the Aussie might be fairly limited,” said Besa Deda, chief economist at St. George Bank Ltd.
The so-called Aussie will find support near the $1.0210 level with bargain hunters stepping in to buy the currency on declines toward that level, she said.
Australian home-loan approvals rose in November for an eighth straight month as buyers responded to a lowering of interest rates by the central bank.
Bond Yields
The number of loans granted to build or buy houses and apartments gained 1.4 percent from October, when they rose a revised 0.8 percent, the statistics bureau said today. The median estimate in a Bloomberg News survey of economists was for a 1 percent increase in approvals.
Australia’s benchmark 10-year bond yield dropped 16 basis points, or 0.16 percentage points, to 3.68 percent. It is poised for its biggest one-day decline since Sept. 5. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, fell six basis points to 2.84 percent.
To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net
To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net
