July 21 (Bloomberg) -- The Australian and New Zealand dollars fell from the highest in more than a month as Federal Reserve Chairman Ben Bernanke said U.S. monetary policy may need to remain accommodative “for an extended period.” The currencies also weakened versus the yen as markets pared expectations Bernanke may outline his strategy for exiting history’s biggest monetary expansion when he testifies before Congress later today. The Fed chairman made his comments in an article written for the Wall Street Journal. “Foreign exchange markets are drawing the conclusion that, if the Fed is not going to remove extra stimulus imminently, there is a cause for caution on the global outlook,” said Sue Trinh, a senior currency strategist at RBC Capital Markets in Sydney. “Markets are taking profit on the recent advances in risk trades ahead of Bernanke’s testimony.” Australia’s currency fell 0.5 percent to 81.29 U.S. cents as of 1:43 p.m. in Sydney, from 81.66 cents in New York yesterday. It touched 81.81 cents, the most since June 12, before Bernanke’s comments were published. The currency slipped 0.8 percent to 76.28 yen. New Zealand’s dollar slid 0.5 percent to 65.46 U.S. cents from 65.76 cents in New York yesterday and earlier touched 65.88 cents, the strongest since June 2. It bought 61.44 yen from 61.94 yen. ‘Gradual Recovery’ The South Pacific nations’ currencies also declined as domestic importers sold them after they climbed to their highest in more than a month versus the U.S. dollar. “Local importers have been quite happy to sell the Australian and New Zealand dollars, adding to supply levels,” said Alex Sinton, a senior dealer at ANZ National Bank Ltd. in Auckland. The Australian dollar will find buyers at 81.05 U.S. cents and New Zealand’s currency will be supported at the 65.20- cent level, he said. New Zealand’s dollar has been the best performer after the Brazilian real among the 16 most-active currencies versus the greenback in the last three months. Its strength “is a point of concern because 64 to 65 percent of world trade is denominated in U.S. dollars,” the nation’s Trade Minister Tim Groser said in a CNBC interview today. “The idea of little, tiny New Zealand using its peashooter to take on world currency market is a joke. We made a decision 25 years ago to have a floating exchange rate and we’ll stick with that,” he said in the interview. ‘Sustainable Growth’ Australia’s dollar briefly trimmed losses after its central bank said current monetary policy was “fostering sustainable growth,” in the minutes from its July 7 meeting that were released today. Demand from China resulted in “surprisingly strong” exports and domestic demand was more resilient than expected, the Reserve Bank of Australia said. “The outlook thus remained for a gradual recovery to begin later in the year, and downside risks to that had diminished,” the bank said. Benchmark interest rates are 3 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ assets. The risk in such trades is that currency market moves will erase profits. Australian government bonds ended six days of losses. The yield on 10-year notes fell 14 basis points, or 0.14 percentage point, to 5.52 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 rose 1.029, or A$10.29 per A$1,000 face amount, to 98.005. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, was little changed at 3.85 percent. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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