Australian, New Zealand Dollars Fall on European Debt Concerns

May 11 (Bloomberg) -- The Australian and New Zealand dollars fell for the first time in three days against the yen on speculation a loan plan of almost $1 trillion to aid debt- laden European governments won’t end the fiscal crisis.

Both currencies ended two days of gains versus the dollar after European Central Bank President Jean-Claude Trichet said yesterday the move wasn’t supported by all 22 of its Governing Council members. The euro pared what had been the biggest two- day advance since March 2009, making investors less interested in buying high-yielding currencies.

“The currency markets in general seem to be taking a less optimistic view of the bailout package,” said Ray Attrill, global research director at Forecast Ltd. in Sydney. “The fact that the euro-dollar has come down removes some of the follow- through support for the Australian dollar.”

Australia’s dollar declined to 83.84 yen as of 9:33 a.m. in Sydney from 84.23 yen in New York yesterday. The so-called Aussie fell to 90.10 U.S. cents from 90.28 cents. New Zealand’s dollar dropped to 66.94 yen from 67.43 yen, and slipped to 71.96 U.S. cents from 72.27 cents.

Governments of the 16-euro nations agreed yesterday to lend as much as 750 billion euros ($958 billion) to the most- indebted countries. The European Central Bank said it will counter “severe tensions” in “certain” markets by purchasing government and private debt.

Moody’s on Greece

Greece may have its credit rating lowered to junk within the next month, Moody’s Investors Service said yesterday, citing the country’s “dismal” economic prospects.

Portugal’s rating, which is also on review for a downgrade, will probably be lowered one level to Aa3 from Aa2, though an “adjustment” of two steps to A1 can’t be ruled out, Moody’s said. No “significant” rating action is likely “in the short run” for Ireland, the company said.

“While the support package has soothed immediate fears of contagion from the Greek crisis, market sentiment remains fragile,” Mike Jones, currency strategist at Bank of New Zealand Ltd. in Wellington wrote in an e-mailed note.