Australian, New Zealand Dollars Weaken Amid Europe-Downgrade Speculation
New Zealand’s dollar, nicknamed the kiwi, declined for a second day as global stock markets tumbled after reports France will be among the nations losing its AAA rating as soon as today. The Aussie dropped the most in more than a week.
“The risks to the European economy and to the broader global economy are still to the downside,” said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia. “That suggests that there’s a cap on commodity prices and commodity currencies like the Aussie and kiwi.”
Australia’s dollar depreciated 0.5 percent to $1.0277 at 1:45 p.m. New York time. It fell as much as 1 percent, the most on an intraday basis since Jan. 5. The Aussie declined 0.3 percent to 79.05 yen.
New Zealand’s currency declined 0.3 percent to 79.14 U.S. cents. It was little changed at 60.90 yen.
France is among several euro-area countries facing downgrades by S&P in the review, a European government official said on condition of anonymity because the announcement had yet to be made. Austria will probably lose its AAA rating on concern about bad debts at the country’s banks, according to a person familiar with the matter.
Germany, Europe’s biggest economy, will retain its AAA rating in a review of euro-area countries’ credit grades by S&P, a European government official said.
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