Australian, N.Z. Dollars Fall as Stock Slide Damps Yield Demand

By Candice Zachariahs

April 8 (Bloomberg) -- The Australian dollar slid for a fourth day, heading for its longest losing streak since January, as regional stocks fell, fueling speculation investors will avoid higher-yielding assets. New Zealand’s currency weakened.

The Australian dollar stayed lower after home-loan approvals rose in February by less than the forecast of 20 economists surveyed by Bloomberg News. New Zealand’s dollar fell to a one-week low against the greenback as hedge-fund manager George Soros said the past month’s stock-market rally may falter.

“Equities have had a couple of bad sessions and the market is getting wary of how risk has been so positive for the last four weeks and ahead of U.S. corporate earnings season,” said Phil Burke, chief foreign-exchange dealer at JPMorgan Chase Bank in Sydney. The Australian dollar may test 70.50 U.S. cents while New Zealand’s currency may fall toward 57.20 U.S. cents, he said.

Australia’s currency fell 0.3 percent to 70.86 U.S. cents as of 11:53 a.m. in Sydney from late in New York yesterday. The currency declined 0.4 percent to 71.10 yen. New Zealand’s dollar was down 0.2 percent to 57.48 U.S. cents and traded as low as 57.32 cents, the weakest since April 2. It slid 0.3 percent to 57.67 yen.

The number of loans granted to build or buy homes and apartments climbed 0.4 percent from January, the statistics bureau said in Sydney today. The median estimate of 20 economists surveyed by Bloomberg News was for a 2 percent gain.

Rates, Jobless Data

The Reserve Bank of Australia yesterday reduced its benchmark rate to a 49-year low of 3 percent, extending cuts made since September to 4.25 percentage points as the nation faces its first recession since 1991. Traders are estimating New Zealand’s central bank will lower its 3 percent target rate by 25 basis points when it meets April 30, according to a Credit Suisse index based on swaps trading.

The Australian dollar also weakened before a report tomorrow that will show the unemployment rate advanced to a five-year high of 5.4 percent in March, according to economists surveyed by Bloomberg News.

“The events that will shape the Aussie dollar over the next week are the employment numbers and the U.S. reporting season,” said Robert Rennie, chief currency strategist at Westpac Banking Corp. in Sydney. The Australian dollar will trade between 70.50 and 71.70 U.S. cents today, he said.

An index of Australian consumer confidence rose the most in eight months, climbing 8.3 percent in April to 92.7 points from March, according to a Westpac Banking Corp. and Melbourne Institute survey released today. April was the 15th month the index was below 100, indicating pessimists outnumber optimists.

Bond Sales

Australia today sold A$700 million ($495 million) of securities maturing May 2021 at a weighted average yield of 4.87 percent. The so-called bid-to-cover ratio at the auction was 3.4.

Australian government bonds declined. The yield on 10-year notes added two basis point, or 0.02 percentage point, to 4.63 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 slipped 0.17, or A$1.70 per A$1,000 face amount, to 104.88.

New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose to 3.96 percent from 3.92 yesterday.

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