The Australian and New Zealand dollars fell against their U.S. counterpart and the yen as increased concern that Europe’s sovereign-debt crisis is worsening reduced demand for higher-yielding assets.
The Aussie, as the currency is known, weakened for a third day against the yen as stocks and commodities slumped amid concern the global economic recovery is faltering. New Zealand’s currency fell as Spain’s borrowing costs climbed.
“Europe has been a little bit worse as of late, and Spain has become more of the focus,” said Fabian Eliasson, head of U.S. currency sales at Mizuho Financial Group Inc. in New York. “There’s more fear, more uncertainty in the market, and that plays out in terms of commodity currencies.”
Australia’s dollar fell 0.6 percent to $1.0251 yesterday in New York. It dropped 1.6 percent to 82.70 yen.
The kiwi, as New Zealand’s currency is nicknamed, weakened 0.8 percent to 81.49 U.S. cents and tumbled 1.8 percent to 65.74 yen.
The Standard & Poor’s 500 Index tumbled 1.7 percent, falling for a fifth day in its longest slump since November. The Thomson Reuters/Jefferies CRB Index of raw materials decreased 1.4 percent.
Spain’s 10-year yields climbed as much as 24 basis points, or 0.24 percentage point, to 5.99 percent, the highest level this year. They jumped more than 40 basis points last week, the biggest surge since the five days ended Jan. 6, as Prime Minister Mariano Rajoy said the nation is in “extreme difficulty.”
Spanish banks may need additional capital if the economy weakens more than expected, Bank of Spain Governor Miguel Angel Fernandez Ordonez said yesterday at a conference in Madrid as he warned the recovery will be slow.
Federal Reserve Chairman Ben S. Bernanke said the U.S. recovery is far from complete, spurring concern the global economic recovery is faltering. He spoke April 9 at a conference in Stone Mountain, Georgia. A report last week showed U.S. employers added the fewest jobs in March in five months.