June 28 (Bloomberg) -- The New Zealand dollar weakened from near a six-week high versus its U.S. counterpart and dropped the most in almost three weeks against Australia’s currency as business confidence in the smaller South Pacific economy fell.
The Australian dollar slipped after rising earlier on speculation Prime Minister Julia Gillard may compromise on a proposed mining tax after ousting Kevin Rudd last week. The currency is headed for an advance this month against the greenback before U.S. reports this week economists say will show consumer confidence weakened and employers cut jobs this month.
“The flow of data points to a more dovish outlook from the Reserve Bank of New Zealand,” said Adrian Foster, head of financial-markets research for Asia at Rabobank Groep NV in Hong Kong. “At times when the global picture looks dimmer, you’d expect the New Zealand dollar to underperform.”
New Zealand’s dollar, nicknamed the kiwi, fell 0.8 percent to 70.86 U.S. cents at 1:53 p.m. in New York, from 71.40 on June 25, paring this month’s gain to 4.1 percent. It touched 71.60 U.S. cents on June 23, its strongest level since May 13. It fell 0.6 percent to 63.35 yen.
Australia’s currency declined 0.2 percent to 87.24 U.S. cents, from 87.41 cents, and is set to advance 3.1 percent in June. The currency was little changed at 77.99 yen.
The kiwi fell 0.5 percent versus the Australian dollar, the most on a closing basis since June 8, to NZ$1.2311.
A net 38.5 percent of New Zealand companies surveyed expect sales and profits will increase over the next 12 months, down from 45.3 percent in May, according to a survey by ANZ National Bank Ltd. released today. The net figure subtracts the number of pessimists from the number of optimists.
In the U.S., the Conference Board’s confidence index fell to a reading of 62.5 in June from 63.3 in May, according to a Bloomberg News survey of economists before the report tomorrow. U.S. employers eliminated 115,000 jobs in June, according to the median forecast of 73 economists in a Bloomberg News survey before the Labor Department releases the data on July 2.
U.S. Treasury two-year yields touched the lowest level in 2010 today, 0.62 percent, on speculation the economic recovery will remain slow.
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