By Mariko Ishikawa Dec. 20 (Bloomberg) -- The Australian dollar rose as Asian stocks rallied and minutes of the central bank’s last meeting showed policy makers saw a continued expansion in the domestic economy even as Europe’s debt crisis weighs on global growth. The New Zealand dollar strengthened before a report this week forecast to show the country’s economic expansion accelerated in the third quarter. Demand for both currencies was limited before Spain sells bills today as the country faces the risk of a credit downgrade. The Reserve Bank of Australia cited the effects of Europe’s fiscal problems on the global economy when it decided cut rates for a second-straight month on Dec. 6. “There may not be enough dovishness in the minutes� to signal further interest-rate cuts, said Annette Beacher, head of research at TD Securities in Singapore. “Too much is priced in already. They’re making sure that the market doesn’t run away.� The Australian dollar gained 0.4 percent to 99.34 U.S. cents as of 4:17 p.m. in Sydney after dropping 0.9 percent yesterday. The currency rose 0.3 percent to 77.47 yen. New Zealand’s dollar strengthened 0.5 percent to 75.96 U.S. cents following a 0.8 percent decline yesterday. The so-called kiwi added 0.5 percent to 59.24 yen. The MSCI Asia Pacific Index of stocks rose 0.2 percent while Standard & Poor’s 500 Index futures added 0.6 percent. RBA Minutes Australia’s central bank lowered its key interest rate to 4.25 percent from 4.50 percent this month because risks to global growth from Europe’s sovereign crisis overshadowed evidence the nation’s mining boom is intensifying, according to minutes released today of the meeting. “There had been further evidence that a major investment boom was in progress and the overall economy was expanding,� the minutes said. “Australia’s main trading partners were also still recording solid growth. This did not suggest any strong need to cut interest rates,� policy makers said. The New York-based Conference Board’s index of Australia’s leading economic indicators added 0.6 percent in October from a revised 0.6 percent gain in September. The index of coincident indicators, which is a gauge of the current growth rate, rose 0.3 percent. New Zealand’s gross domestic product expanded 0.6 percent in the third quarter from the previous three months, according to the median estimate of economists surveyed by Bloomberg before Statistics New Zealand reports its figures on Dec. 22. GDP rose by 0.1 percent in the second quarter. New Zealand’s GDP “will be a relatively positive number, so you will see some money flow into the kiwi,� said Alex Sinton, a senior dealer at ANZ National Bank Ltd. in Auckland. “There are buyers and profit takers on the downside for the kiwi and Aussie,� he said. Spain Auction Gains in the South Pacific nations’ currencies were limited as Spain is due to auction three- and six-month securities today. Fitch Ratings lowered its outlook on France to “negative� on Dec. 16 and also put Spain and Italy on review for a reduction. “Recent bond auctions may have been a little better than what the market has feared, but I think there could be some events that might be a little worrying such as potential sovereign-rating downgrades,� said Janu Chan, an economist at St. George Bank Ltd. in Sydney. Yields on 10-year Australian government debt was little changed at 3.72 percent after earlier dropping three basis points, or 0.03 percentage point, to a record 3.69 percent. The Australian dollar has fallen 2.9 percent against its U.S. counterpart this year, while the kiwi has dropped 2.6 percent. -- Editors: Rocky Swift, Benjamin Purvis To contact the reporters 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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