Australian, New Zealand Dollars Decline From One-Month High

Feb. 10 (Bloomberg) -- The Australian and New Zealand dollars fell from near a one-month high after a report said Russian businesses may seek to reschedule loans and Australia’s business confidence dropped to a record low.

Australia’s currency slid as a sentiment index declined 12 points to minus 32, the lowest since the series began in 1989, according to a National Australia Bank Ltd. survey of more than 400 companies. Russian banks and businesses may ask foreign banks to reschedule loans worth $400 billion, the Nikkei newspaper reported from Moscow, citing an interview with Anatoly Aksakov, the head of the Russian Association of Regional Banks.

“It’s certainly suggesting that all is not well from a risk perspective and the Aussie dollar is leveraged to the global growth and risk cycle,” said Sue Trinh, a senior currency strategist at RBC Capital Markets in Sydney. “We’ve also seen pretty bad domestic data with the NAB business conditions and confidence survey showing record lows.”

Australia’s currency fell 0.5 percent to 66.89 U.S. cents as of 12:16 p.m. in Sydney from 67.21 cents late in Asia yesterday. It earlier strengthened to as much as 68.49 cents, the highest since Jan. 13. The currency slid 0.9 percent to 60.96 yen. The currency will find so-called support at 66.80 and then 66.40 U.S. cents, Trinh said.

New Zealand’s dollar slumped 0.2 percent to 53.11 U.S. cents from 53.24 in Asia yesterday. The so-called kiwi rose as high as 54.47 cents, the strongest since Jan. 20. It bought 48.41 yen from 48.72.

Obama Demands

The currencies earlier rose on speculation U.S. Treasury Secretary Timothy Geithner will announce a financial rescue plan in Washington today, spurring demand for higher-yielding assets.

U.S. President Barack Obama is demanding a stimulus bill on his desk before Congress leaves for the Presidents’ Day holiday on Feb. 16.

Benchmark interest rates are 3.25 percent in Australia and 3.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero percent in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.

Australian government bonds were little changed with the yield on the 10-year note at 4.36 percent, according to data compiled by Bloomberg.

New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, fell to 3.46 percent from 3.49 yesterday.