Australian, New Zealand Dollars Snap Gains on European Debt Crisis Concern
The so-called Aussie slid on prospects Asian stocks may decline, sapping demand for higher-yielding assets. Losses in the New Zealand dollar were limited after a report showed the economy expanded in the third quarter more than economists had forecast as the Rugby World Cup boosted spending.
“I think we’re still at the beginning of the crisis and nowhere near towards the end,” said Keagan York, the SYdney- based head of foreign-exchange strategy at Compass Global Markets. “The ECB loans operation was only a temporary measure to get some liquidity back into the markets. You’ll see the Aussie start to drift back off.”
The Australian dollar was at $1.0088 at 10:25 a.m. in Sydney from $1.0103 in New York yesterday. The currency slid to 78.78 yen from 78.82.
New Zealand’s dollar traded at 76.92 U.S. cents from 77.04 yesterday, when it advanced 0.3 percent. The so-called kiwi fell 0.1 percent to 60.07 yen.
Euro-area lenders took a record 489 billion euros ($638 billion) from the ECB in three-year loans yesterday, more than economists’ median estimate of 293 billion euros in a Bloomberg News survey. Policy makers are flooding the banking system with cheap money in an attempt to stave off a credit crunch by encouraging banks to maintain lending.
New Zealand’s gross domestic product expanded 0.8 percent in the third quarter from the previous three months and 1.9 percent from a year earlier, a government report showed today in Wellington. The median estimates in a Bloomberg News survey of 14 economists were for a 0.6 percent quarterly gain and a 2.2 percent year-on-year advance.
-- Editors: Benjamin Purvis, Garfield Reynolds
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