The Australian and New Zealand dollars headed for a weekly loss amid concern that European leaders are struggling to contain the region’s debt crisis, sapping demand for riskier assets. New Zealand’s dollar traded 0.1 percent from a one-week low as Asian stocks extended a decline in global shares. Demand for the so-called Aussie was also limited after a report today showed export prices in the first three months of the year fell for a second quarter. Meetings hosted by the International Monetary Fund start today in Washington, where Group of 20 officials discuss Europe’s fiscal problems. “This market is expecting bad news out of Europe,� said Kurt Magnus, executive director of foreign-exchange sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage. “There is no conviction in the equity markets, which means there is no confidence. Against the U.S. dollar, the Aussie can go down to about $1.0150 on the next phase of European worry.� The Australian dollar traded at $1.0336 as of 4:04 p.m. in Sydney from $1.0331 in New York yesterday, having declined 0.3 percent this week. The $1.0150 level was last seen on Jan. 9. The Aussie fetched 84.29 yen from 84.31. New Zealand’s dollar bought 81.33 U.S. cents from 81.37 yesterday, when it touched 81.22, the weakest since April 10. The so-called kiwi has fallen 1.2 percent since April 13. The currency was at 66.31 yen from 66.40. The MSCI Asia Pacific Index (MXAP) of stocks slid 0.5 percent. The MSCI World (MXWO) Index of stocks fell 0.5 percent yesterday, while the Standard & Poor’s 500 Index dropped 0.6 percent. Export Prices Australia’s export price index dropped 7 percent from the fourth quarter, when it declined 1.5 percent, the statistics bureau said today. The index was forecast to fall 3 percent, according to the median forecast of economists in a Bloomberg News survey. The South Pacific nations’ currencies were supported versus the yen on prospects the Bank of Japan (8301) will ease policy next week. Governor Masaaki Shirakawa said in a speech in Washington yesterday that Japan still needs monetary stimulus. Investors should bet the kiwi will fall against the Canadian dollar, its commodity-linked peer, as the nations’ central banks diverge in their policy outlooks, BNP Paribas SA said. Enter the trade at current levels with the target of 78 Canadian cents per New Zealand dollar, Michael Sneyd, a currency strategist for BNP Paribas in London, wrote to clients yesterday. The trade should be abandoned if the kiwi rises to 82.20 Canadian cents. New Zealand’s currency slid 0.2 percent to 80.88 today. Policy Divergence BNP expects the Bank of Canada to raise benchmark interest rates in the second quarter of next year. The Reserve Bank of New Zealand, which meets April 25, has warned that a strong currency may delay rate increases. As gains in inflation slow, the central bank is provided with a reason not to make policy changes, Sneyd wrote in the research note. A Credit Suisse Group AG index based on swaps indicates the RBNZ will raise interest rates by nine basis points from a record-low of 2.5 percent over the next 12 months, compared with 36 basis points of increases indicated on March 21. A basis point is 0.01 percentage point. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, was at 2.90 percent today, after yesterday touching 2.895 percent, the least since Feb. 16. Yields on Australia’s benchmark 10-year notes were little changed at 3.82 percent, while three-year rates dropped one basis point to 3.23 percent. To contact the reporter on this story: Monami Yui in Tokyo at myui1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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