March 21 (Bloomberg) -- The Australian and New Zealand dollars fell against their U.S. counterpart as stocks declined amid damped demand for higher-yielding assets.
The Aussie and kiwi extended yesterday’s drops, which came after BHP Billiton Ltd., the world’s biggest mining company, said steel output growth in China has slowed as it puts greater focus on consumers rather than building projects. The currencies earlier gained after Greek Prime Minister Lucas Papademos won parliamentary approval for a 130 billion-euro ($172 billion) international bailout. The currencies have rallied against the dollar this year.
“It might be a feeling that this move is getting a little bit overextended,” said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York. “The market is getting a bit tired up here and at some point it’s going to correct.”
Australia’s currency fell 0.4 percent to $1.0438 at 11:43 a.m. in New York after declining 1.2 percent yesterday, the sharpest slide since Dec. 12. It rose as much as 0.5 percent earlier. The Aussie dropped 0.3 percent to 87.44 yen after dropping 0.8 percent yesterday, the most since March 12.
New Zealand’s dollar lost 0.5 percent to 81.32 U.S. cents, after earlier rising 0.6 percent, and slumped 0.4 percent to 68.12 yen. The MSCI World Index of equities dropped 0.3 percent.
The kiwi has gained 4.6 percent against the dollar this year and the Aussie has added 2.2 percent.
Australia’s currency weakened yesterday on concern an economic slowdown in China, the nation’s biggest trading partner, would damp demand for its commodity exports.
Earnings from Australia’s minerals and energy exports may total A$199.2 billion ($208 billion) in the year ending June 30, the Bureau of Resources and Energy Economics said in a report today. That compares with a December forecast of a record A$205.8 billion, and A$179.2 billion a year earlier.
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