Australian, New Zealand Dollars Fall as Regional Stocks Slide

March 30 (Bloomberg) -- The Australian and New Zealand dollars slid for a second day as regional stocks and commodities tumbled on concerns about the depth of the global recession.

New Zealand’s currency pared its strongest month of gains since 1985 as factory output in Japan, the world’s second- largest economy, fell for a fifth month in February, its longest losing streak since 2001. The U.S. jobless rate climbed in March to the highest level since 1983 and manufacturing shrank, putting the recession on the brink of becoming the longest in seven decades, economists said before reports this week.

“The last two days of March are likely to be a bit of a whimper with the markets giving back some of this month’s gains,” said Alex Sinton, a senior currency dealer at ANZ National Bank Ltd. in Auckland. “The market is looking for signs of life in the economy.”

Australia’s currency fell 0.6 percent to 69.09 U.S. cents as of 12:29 p.m. in Sydney, paring its advance in March to 8 percent, its best monthly performance since 2007. The currency slipped 0.4 percent to 67.69 yen from 67.93 yen late in New York on March 27.

New Zealand’s dollar declined 0.5 percent to 56.69 U.S. cents from 57.06 cents in New York. It has strengthened 13 percent in March, the most since August 1985. It bought 55.60 yen, taking this month’s advance to 14 percent, also the most since 1985.

Australia’s dollar may fall toward 68.70 U.S. cents today while New Zealand’s may slide toward 56.02 cents, Sinton said.

Homes Sales, Futures Bets

New Zealand home-building approvals rose for the first time in three months in February. Approvals jumped 11.6 percent from January when they declined 13 percent to a record, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures. Australian sales of newly built home gained 3.9 percent in February, the Housing Industry Association said in a report e-mailed to Bloomberg News today.

Futures traders reversed bets that the Australian dollar will decline against the greenback, holding the largest net long position since August, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on an advance in the Australian dollar compared with those on a drop -- so-called net longs -- was 8,413 on March 24, compared with net shorts of 419 a week earlier.

Quarterly Declines

The Australian dollar is set to decline 1.5 percent in the three months to March 31, its third straight decline after dropping 11 percent and 17 percent in the September and December quarters, respectively. New Zealand’s currency will slide 2 percent, the smallest drop in four consecutive quarters of losses.

The currencies weakened after their central banks slashed interest rates amid falling prices for commodities and equities as the industrialized world enters a synchronized recession. Benchmark interest rates are 3.25 percent in Australia and 3 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero percent in the U.S.

Australian private sector credit grew 0.5 percent in February while retail sales last month shrank for the first time in five months, according to economists polled by Bloomberg News. The data will be released March 31 and April 1, respectively.

Australian government bonds rose, ending the longest stretch of losses since February 2008. The yield on 10-year notes fell four basis points, or 0.04 percentage point, to 4.53 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 added 0.30, or A$3 per A$1,000 face amount, to 105.74.

New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose to 4.09 percent from 3.85 percent on March 27.