Australia, New Zealand Dollars Slip on U.S. Stocks, Commodities

By Candice Zachariahs

Nov. 6 (Bloomberg) -- The Australian and New Zealand dollars declined as U.S. stocks and the prices of commodities the nations export fell, prompting investors to sell higher-yielding assets.

New Zealand's currency extended its decline after a government report showed the nation's jobless rate rose to the highest in five years in the third quarter. The South Pacific nations' currencies touched 2-week highs yesterday 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 in Wellington at ANZ National Bank Ltd. ``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 1.8 percent to 67.91 U.S. cents as of 9:11 a.m. in Sydney from 69.15 cents late in Asia yesterday. The currency fell 2.9 percent to 66.40 yen.

New Zealand's dollar lost 1.2 percent to 59.50 U.S. cents from 60.21 in Asia yesterday. It bought 58.23 yen from 59.53.

The currencies slipped after U.S. equities slumped as a report showed the world's largest economy lost the most private- sector jobs in six years in October. The UBS Bloomberg Constant Maturity Commodity index of 26 raw materials fell the most since Oct. 22. Raw materials account for 60 percent of Australia's exports, and 70 percent of New Zealand's.

New Zealand's unemployment rate increased to 4.2 percent from 3.9 percent in the previous three months, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures. The median estimate of 12 economists surveyed by Bloomberg News was for 4.3 percent.

``The kiwi will actually perform even worse than the Aussie,'' said Allen, who expects the Australian dollar to strengthen towards NZ$1.18 into next week. The Aussie traded at NZ$1.1429 from NZ$1.1484 yesterday.

Australia's unemployment rate probably climbed to 4.4 percent in October, from 4.3 percent in September, according to a separate survey of 13 economists. The report will be released at 11:30 a.m. in Sydney. The Australian dollar may slip as low as 67.60 U.S. cents today, said Allen.

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