The Australian dollar halted gains that took it to the strongest level in almost 12 weeks on concern Greece will struggle to reach agreement on a debt-swap deal with its creditors, sapping demand for riskier assets. The so-called Aussie fell as a report showed producer-price inflation is slowing, providing scope for the Reserve Bank of Australia to implement a third consecutive interest-rate cut. The New Zealand dollar erased earlier losses along with Asian shares before reports that may add to signs of growth in the U.S. economy. “It’s still not perfectly clear whether we’re going to have a voluntary deal� on Greek debt, said Annette Beacher, head of Asia-Pacific research at TD Securities Inc. in Singapore. “There were expectations that everything would have been fixed by the weekend and that yet again has not happened. We only have further downsides ahead� for currencies including the Australian and New Zealand dollars. The Australian dollar slid 0.1 percent to $1.0475 as of 2:08 p.m. in Sydney from $1.0484 in New York on Jan. 20. It earlier climbed as high as $1.0494, the strongest since Nov. 1. The currency was at 80.72 yen from 80.75. New Zealand’s dollar, nicknamed the kiwi, traded at 80.64 U.S. cents from 80.63 on Jan. 20, after falling as much as 0.3 percent. It fetched 62.14 yen from 62.11. The MSCI Asia Pacific Index rose 0.1 percent, reversing an earlier decline. Greek Debt-Swap Bondholders negotiating a debt swap with Greece have made their “maximum� offer, leaving it to the European Union and International Monetary Fund to decide whether to accept the deal, said Charles Dallara, who’s representing private creditors in the talks. EU finance ministers will meet in Brussels today to discuss new budget rules, a financial firewall to protect indebted states and the Greek debt swap. Demand for the Australian dollar was also limited after a report showed producer inflation is slowing, providing scope for the Reserve Bank to implement a third consecutive interest-rate cut. An index of producer prices advanced 0.3 percent in the October-to-December period from the prior quarter, when it gained 0.6 percent, the Bureau of Statistics said in Sydney today. The median estimate of 20 economists surveyed by Bloomberg News was for a 0.4 percent increase. Consumer prices are forecast to have climbed 0.2 percent last quarter from the earlier period, another survey showed ahead of a separate report on Jan. 25. That compares with a 0.6 percent gain in the third quarter. Australia Inflation The consumer prices report “has to be a very high number in order for the RBA not to deliver,� said TD’s Beacher. “We think there’s Aussie downside all week and also kiwi downside.� A Credit Suisse Group AG index based on swaps indicates an 81 percent chance that the RBA will lower rates by 25 basis points, or 0.25 percentage point, when policy makers gather on Feb. 7. The benchmark rate is currently 4.25 percent following quarter-point reductions at each of the bank’s two most recent meetings. In the U.S., gross domestic product probably rose at a 3 percent annual rate in the fourth quarter after advancing 1.8 percent in the previous three-month period, according to the median forecast of economists surveyed by Bloomberg before the Commerce Department’s Jan. 27 release. Other reports this week may show gains in new home sales and orders for durable goods. “Any positive economic outcomes in the U.S. would represent a continuation of the trend in recent weeks and months, and that would certainly be beneficial for risky currencies� such as the Aussie and kiwi, said Andrew Salter, a strategist at Australia & New Zealand Banking Group Ltd. in Sydney. Australia’s government bonds declined, pushing the yield on the 10-year security up four basis points, or 0.04 percentage point, to 3.87 percent. -- Editors: Rocky Swift, Naoto Hosoda To contact the reporter 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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