Aussie Weakens as Trade Surplus Narrows Amid Europe Crisis; Kiwi Declines

The Australian dollar declined after a report showed the nation’s trade surplus narrowed by more than economists estimated, adding to signs Europe’s sovereign debt crisis is weighing on global growth.

The Australian and New Zealand dollars rose last week after European leaders agreed to tighter budget rules and increase funds for a war chest to help defuse the region’s debt woes. Losses in the so-called Aussie and kiwi dollars were limited as Asian stocks extended a global rally.

“The European crisis is a downer on the Aussie economy,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “We had a very strong rally in both of those currencies since Friday evening and they are taking a rest.”

The Australian dollar fell 0.4 percent to $1.0174 as of 12:09 p.m. in Sydney from Dec. 9, when it rose 0.5 percent. The Aussie dropped 0.4 percent to 79.01 yen.

New Zealand’s currency declined 0.3 percent to 77.29 U.S. cents. It slid 0.3 percent to 60.01 yen.

The MSCI Asia Pacific Index of stocks rose 1 percent. The MSCI World Index of stocks on Dec. 9 tumbled as much as 0.6 percent to the lowest level since Nov. 30, before rebounding to gain 1.1 percent on the day.

Trade Surplus Narrows

Australia’s trade surplus narrowed to A$1.60 billion ($ 1.63 billion) in October from a revised A$2.25 billion in September, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey was for a surplus of A$2 billion.

Australian home-loan approvals rose 0.7 percent in October from a month earlier, when it grew a revised 1.9 percent, a separate report showed today. Economists in a Bloomberg News poll expected approvals to stagnate.

European Union leaders meeting in Brussels last week agreed to channel as much as 200 billion euros ($267 billion) to the International Monetary Fund and bowed to European Central Bank demands for a tightening of anti-deficit rules.

“I think you’ll get a good little rally in Asian stock markets today,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage. “The dips in both the Aussie and kiwi should be bought.”

-- Editors: Rocky Swift, Benjamin Purvis

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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