Oct. 22 (Bloomberg) -- The Australian and New Zealand dollars fell, after touching the strongest in more than 14 months yesterday, as Asian stocks dropped and China’s economic growth fell short of some analysts forecasts. The currencies also weakened against the yen as U.S. stocks slid after a Rochdale Securities analyst cut Wells Fargo & Co., the largest U.S. home lender, to “sell.” Both South Pacific dollars extended declines as China, Australia’s largest trading partner, said its economy grew 8.9 percent in the third quarter, compared with the median estimate from economists for a 9 percent expansion. “Everybody was buying up risk currencies in anticipation of solid numbers coming out of China and now traders are taking profit after the numbers came out on expectations,” said Charles Wiggins, corporate risk manager at Custom House Global Foreign Exchange in Sydney. “A lot of talk now is: Has the market got ahead of itself both in equities and foreign exchange?” Australia’s currency fell 0.4 percent to 92.53 cents as of 4:21 p.m. in Sydney from 92.92 cents yesterday in New York, when it climbed to 93.29 cents, the most since August 2008. The currency fell 0.1 percent to 84.36 yen. New Zealand’s dollar slid to 75.52 cents from 76.05 cents yesterday, when it advanced to 76.35 cents, the strongest since July 2008. The currency declined 0.5 percent to 68.85 yen. Australia’s dollar will find buyers at 91.80 cents while New Zealand’s will be supported at 74.90 cents, Wiggins said. China’s Economy China’s urban fixed-asset investment climbed 33.3 percent in the first nine months from a year earlier, the statistics bureau said. Industrial output and retail sales accelerated in September, separate reports showed. The MSCI Asia Pacific index of shares dropped for a second day, losing 1 percent. The Standard and Poor’s 500 index declined 0.9 percent yesterday after Rochdale Securities analyst Dick Bove downgraded Wells Fargo and said earnings were boosted by mortgage-servicing fees rather than improving business trends. “The Wells Fargo news spooked the market,” said Tony Bieber, a foreign-exchange trader at Suncorp-Metway Ltd. in Brisbane. “The market is still happy to sell U.S. dollars and this may be a buy-on-dips opportunity,” for currencies like the Australian dollar, he said. Bollard’s Pledge New Zealand’s dollar pared yesterday’s 1.5 percent gain, which came after central bank Governor Alan Bollard said a strengthening currency won’t be an impediment to raising interest rates. Policy makers meet Oct. 29 and are expected by all 11 economists surveyed by Bloomberg News to leave the official cash rate unchanged. Bollard said Sept. 10 that he will not raise interest rates until “the latter part of 2010.” “The key is next week’s RBNZ meeting,” said Amanda Tan, an economist at St. George Bank Ltd. in Sydney. “We don’t expect any changes in the interest rate but there could be changes to the statement. The New Zealand dollar could retest 76.35 cents, which would be immediate resistance.” St. George expects the central bank to begin its monetary tightening cycle at the start of next year. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates and which is sensitive to interest-rate expectations, fell to 4.68 percent after climbing to 4.70 yesterday, the highest level since December 2008. Australian government bonds were little changed. The yield on the benchmark 10-year note held at 5.65 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 fell 0.031, or A$0.31 per A$1,000 face amount, to 97.139. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

Source