The Australian and New Zealand currencies fell, snapping three days of gains versus the U.S. dollar, as prices of commodities that make up more than half the nations’ exports declined the most in three months. The currencies also ended a five-day winning streak against the yen after a private report showed U.S. companies cut the most jobs in seven years last month, spurring investors to sell high- yielding assets. Australia’s dollar extended losses after home- building approvals dropped the most in six years in November, adding to signs the economic slowdown is worsening. “Commodity prices are coming off and the building approvals report clearly indicates that Australia is suffering from a housing-market bubble, which has burst,” said Thomas Harr, a senior currency strategist at Standard Chartered Plc in Singapore. “It’s negative for the Australian dollar.” Australia’s dollar fell to 70.50 U.S. cents at 3:43 p.m. in Sydney, from 72.07 cents late in Asia yesterday. It earlier reached a three-month high of 72.69 cents. The currency slid 2.9 percent against the yen, the most since Dec. 19, to 65.25. It touched 68.26 yen yesterday, the strongest since Nov. 11. The currency may weaken to 70 U.S. cents by March 31, Harr said. New Zealand’s dollar declined to 58.62 U.S. cents from 59.65 cents. It earlier reached 60.33 cents, the most since Dec. 18. The currency weakened to 54.24 yen from 55.61 yesterday, when it touched 56.33, the highest since Nov. 14. Steepest Drop The number of permits granted to build or renovate houses and apartments in Australia fell 12.8 percent in November, the steepest drop since November 2002, following a revised 3.1 percent decline in October, the Bureau of Statistics said in Sydney. The median estimate in a Bloomberg News survey of economists was for a 1.5 percent loss. Companies in the U.S. eliminated 693,000 jobs in December, the most since records began in 2001, ADP Employer Services said yesterday, when the Standard & Poor’s 500 Index fell 3 percent, trimming this year’s advance to less than 0.4 percent. The MSCI Asia-Pacific Index of regional shares dropped 3.3 percent today. “Risk appetite has deteriorated and equity markets obviously had a very poor session,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “This is weighing on the Australian and New Zealand dollars.” The Reuters/Jeffries CRB Index of 19 raw materials fell 4.7 percent to 231.49 yesterday, the largest loss since Oct. 10. The Bloomberg UBS Constant Maturity Commodity Index of 26 components slipped 4.2 percent to 905.91, the biggest decline since Dec. 5. Carry Trade Implied volatility on one-month Australian dollar options against the U.S. dollar rose to 28.04 percent from 27.91 percent late in New York yesterday, indicating a greater risk of exchange-rate fluctuations capable of eroding profit on so-called carry trades. In a carry trade, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the two. The risk is that currency market moves erase those profits. Benchmark interest rates are 4.25 percent in Australia and 5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S. Losses in the Australian and New Zealand dollars may be limited on speculation borrowing costs will remain higher than those in the Group of Seven industrialized nations, according to Bank of New York Mellon Corp. “As we look forward, the Aussie and the Kiwi are likely to be more resilient because of higher interest rates,” Michael Woolfolk, senior currency strategist at the bank, said in an interview with Bloomberg Television. “They are not likely to follow the zero-interest-rate path of the G-7 this year.” The G-7 is composed of the U.S., Japan, France, Italy, Germany, the U.K. and Canada. RBA, RBNZ Bets Traders are betting the Reserve Bank of Australia will lower rates an additional 1.27 percentage points over the next 12 months, while the Reserve Bank of New Zealand will reduce its benchmark by 1.25 percentage points, according to Credit Suisse indexes based on overnight swaps trading. Australian government bonds advanced, sending the two-year note yield down nine basis points, or 0.09 percentage point, to 2.90 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due August 2010 rose 0.129, or A$1.29 per A$1,000 face amount, to 103.623. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, declined to 4.40 percent from 4.43 percent yesterday.

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