Australia, New Zealand Dollars Fall as Commodities, Stocks Slip

By Candice Zachariahs

Oct. 15 (Bloomberg) -- The Australian and New Zealand dollars fell as U.S. equities and commodity prices slipped on concern a $3 trillion dollar push to shore up the global financial system may not prevent a world recession.

The Australian dollar retreated after yesterday's record gain against the yen as U.S. equities fell on speculation company earnings will weaken on slumping demand. The Australian and New Zealand currencies slid the first day in three versus the dollar as prices fell for commodities the nations export.

``Some of the euphoria of the last session has faded,'' said Greg Gibbs, a currency strategist at ABN Amro Australia Ltd. in Sydney. The Australian dollar ``found a near-term top around 72-odd overnight and we've come off in concert with a generally firmer U.S. dollar.''

The Australian dollar slid 3.6 percent to 69.66 U.S. cents as of 7:30 a.m. in Sydney, from 72.28 cents late in Asian trading yesterday. The currency declined 4.3 percent to 71.03 yen, from 74.19 yen. It surged 9.8 percent against the yen yesterday, the biggest gain since the Australian currency began freely trading in December 1983.

New Zealand's dollar fell 2.2 percent to 61.94 U.S. cents from 63.34 cents late in Asia yesterday. It slid 2.8 percent to 63.15 yen.

The Australian dollar has dropped 29 percent against the greenback and 31 percent versus the yen over the past three months as commodity prices tumbled and the turmoil in financial markets prompted investors to dump higher-yielding assets. New Zealand's currency has declined 20 percent and 22 percent against the dollar and the yen, respectively.

Stocks, Commodities

The currencies also fell as the Standard & Poor's 500 Index pared Monday's biggest one-day advance since 1939 and the Dow Jones Industrial Average trimmed its best rally since 1933. PepsiCo, the world's second-biggest soft-drink maker and largest snack producer, fell 12 percent after posting lower-than- expected profits and cutting its forecasts.

The UBS Bloomberg Constant Maturity Commodity index of 26 raw materials fell in New York trading. Gold, Australia's third- most valuable raw material export, fell for a fourth session in New York. Raw materials account for 60 percent of Australia's exports and 70 percent of New Zealand's.

To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net