The Australian and New Zealand dollars fell, reversing earlier gains, as U.S. stocks declined amid concern Europe’s sovereign-debt crisis will worsen and growth will slow in China.
The Standard & Poor’s 500 Index fell 0.1 percent as the euro neared a four-year low versus the dollar on speculation the European Central Bank may need to take steps to boost the liquidity in the financial system. Freeport-McMoran Copper & Gold Inc. and Codelco, the world’s two largest copper producers, said China’s plans to curb its economy threaten to reduce demand for the metal after prices slumped 15 percent in two months.
“The commodity currencies, they all have a high correlation with U.S. equities,” said Amelia Bourdeau, a currency strategist in Stamford, Connecticut at UBS AG. “Because U.S. equities are lower today, it’s general risk-off sentiment.”
Australia’s currency dropped 0.4 percent to 83.88 U.S. cents at 2:01 p.m. in New York from 84.21 cents yesterday. It earlier rose as high as 85.23 U.S. cents. The Aussie traded at 77.60 yen.
New Zealand’s dollar declined 0.2 percent to 68.07 U.S. cents and gained 0.3 percent to 62.99 yen.