June 12 (Bloomberg) -- Australia’s dollar weakened against its U.S. counterpart as stocks and commodity prices dropped amid increased concern that Europe’s debt crisis is spreading.
New Zealand’s dollar also fell, reversing earlier gains, as concern that Spain’s bailout package signals a worsening of the debt crisis damped demand for higher-yielding assets. Spain asked for as much as 100 billion euros ($125 billion) to save its banking system, making it the fourth member of the currency bloc to seek a rescue.
The Australian dollar fell 0.5 percent to 98.64 U.S. cents yesterday in New York after earlier gaining as much as 0.9 percent. The Aussie dropped 0.6 percent to 78.36 yen.
New Zealand’s dollar declined 0.2 percent to 77.06 U.S. cents after appreciating as much as 1.1 percent. The kiwi, as the currency is nicknamed, lost 0.2 percent to 61.10 yen.
The MSCI World Index of equities slumped 0.4 percent and the Thomson Reuters/Jefferies CRB Index of raw materials fell 0.8 percent.
Seven months after winning a landslide victory, Spanish Prime Minister Mariano Rajoy was forced to abandon his bid to recapitalize banks without external help. The bailout loan will be channeled through the state’s bank-rescue fund and extended to lenders that need it, Economy Minister Luis de Guindos Jurado said in Madrid on June 9.
Spanish and Italian 10-year bonds fell for a fourth day, reversing earlier gains. The Spanish yield rose 31 basis points to 6.52 percent, while the rate on the Italian securities climbed 27 basis points to 6.04 percent.
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