Australia, New Zealand Dollars Fall as Stocks, Commodities Drop

By Candice Zachariahs

Nov. 6 (Bloomberg) -- The Australian and New Zealand dollars fell, ending three days of gains, as global stocks and the prices of commodities the nations export slumped, prompting investors to sell higher-yielding assets.

New Zealand's currency extended losses after a government report showed the jobless rate rose to the highest in five years. The South Pacific nations' currencies yesterday touched the highest in two weeks after U.S. stocks surged in the biggest election day rally in 24 years.

``The euphoria of yesterday is going to wear off and leave people with a bit of a hangover,'' said Tony Allen, head of currency trading at ANZ National Bank Ltd. in Wellington. ``Commodities have ended weaker on the day and risk aversion is coming back. That's going to put pressure on the Aussie and kiwi,'' he said, referring to the currencies by their nicknames.

Australia's currency slid 2.7 percent to 67.27 U.S. cents as of 5:12 p.m. in Sydney from 69.15 cents late in Asia yesterday. The currency fell 3.8 percent to 65.77 yen.

New Zealand's dollar lost 1.4 percent to 59.35 U.S. cents and slipped 2.5 percent against Japan's currency to 58.02 yen.

The currencies weakened after the Standard & Poor's 500 Index slumped more than 5 percent yesterday as reports showed the world's largest economy lost the most private-sector jobs in six years and services industries contracted the most on record.

Asian stocks declined after News Corp., Cathay Pacific Airways Ltd. and Isuzu Motors Ltd. cut profit forecasts.

The UBS Bloomberg Constant Maturity Commodity index of 26 raw materials fell the most since Oct. 22. Raw materials account for about 60 percent of Australia's exports and 70 percent of New Zealand's.

Jobless Rate

New Zealand's unemployment rate climbed to 4.2 percent last quarter, from 3.9 percent in the previous three months, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures.

The Australian dollar briefly pared losses after a government report showed employment unexpectedly surged in October with the economy adding 34,300 jobs, after losing a revised 3,300 in September. The median estimate of economists surveyed by Bloomberg News was for a decline of 10,000 jobs.

``The data was a surprise on the upside but everyone still expects a downward trend and people are looking at October as maybe the last gasp,'' said Amy Auster, head of foreign exchange and international economics research at Australia & New Zealand Banking Group Ltd. in Melbourne. ``We're in a pretty solid range from 66.50 to around 69.50 cents and I think that will remain.''

Australian government bonds advanced. The yield on the benchmark 10-year note fell 19 basis points to 5.144 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 gained 1.507, or A$15.07 per A$1,000 face amount, to 100.832. A basis point is 0.01 percentage point.

New Zealand's two-year swap rate, a fixed payment made to receive floating rates, rose to 6.07 percent from 5.82 yesterday.

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