Australian, New Zealand Dollars Pare Increases on European Debt Discord
The Australian and New Zealand dollars pared gains against their U.S. counterpart amid concern European leaders won’t agree how to solve the region’s debt crisis.
Global stocks erased gains after Chancellor Angela Merkel told German coalition lawmakers that the 500 billion euro ($654 billion) cap on Europe’s planned permanent bailout fund will stay in place, two officials with knowledge of the discussion said. The South Pacific currencies gained earlier amid optimism about the U.S. economic recovery as retail sales rose.
“We just need the situation in Europe to stabilize,” said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., a unit of the world’s biggest interdealer broker. “The U.S. economy is much better than people were predicting only a couple of months ago.”
New Zealand’s currency was little changed at 76.32 U.S. cents at 12:10 p.m. New York time. It earlier rose as much as 0.6 percent to 76.75. It fetched 59.42 yen from 59.45.
The Australian dollar traded 0.1 percent stronger $1.0084, down from as strong as $1.0163. The Aussie was 0.1 percent higher at 78.52 yen.
The MSCI World Index (MXWO) fell 0.1 percent after gaining as much as 0.8 percent.
Australia’s government bonds advanced, with the yield on the 10-year note falling 8 basis points, or 0.08 percentage point, to 3.80 percent. It reached 3.78 earlier, the lowest since at least September 1992 when Bloomberg began compiling data.
A National Australia Bank Ltd. survey today showed that Australian business confidence was unchanged in November. The confidence index was 2 last month, the same as in October, according to the poll of about 550 companies conducted Nov. 21-S25.
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