By Candice Zachariahs
Nov. 11 (Bloomberg) -- The Australian and New Zealand dollars fell by the most in more than two weeks as U.S. stocks dropped on a worsening outlook for company earnings, prompting investors to dump higher-yielding assets.
The currencies gave back all of their gains from yesterday, which came as China pledged to spend $586 billion dollars to prop up its economy, Australia's biggest trading partner.
``Currency markets continue to look at stocks to gauge the health of the banking sector, corporate sector and the economy generally,'' said Richard Grace, chief currency strategist at Commonwealth Bank of Australia in Sydney. ``That's driving risk aversion through the market, which weighs on the Aussie,'' he said, referring to the currency by its nickname.
Australia's currency dropped 3.7 percent, the most since Oct. 24, to 66.82 U.S. cents as of 8:02 a.m. in Sydney, from 69.40 cents late in Asia yesterday. The currency slid 5.2 percent to 65.40 yen.
New Zealand's dollar slumped 3.9 percent, also the most since Oct. 24, to 57.89 U.S. cents, from 60.21 in Asia yesterday. It bought 56.60 yen from 59.83.
The currencies slipped as U.S. equities halted a global rally that began after China announced its stimulus package and the Group of 20 nations said it will act ``urgently'' to bolster growth and called on policy makers to cut interest rates worldwide.
General Motors Corp. plummeted after Deutsche Bank AG said the automaker's shares may go to zero, while Google Inc., the biggest seller of online ads, sank on concern fourth-quarter revenue growth will stall.
To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net
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