The New Zealand dollar strengthened for a second day after reports showed China’s industrial production and retail sales expanded, boosting demand for higher-yielding assets. New Zealand’s currency gained versus 15 of its 16 major counterparts as Asia’s benchmark stock index approached a two- year high. The Australian dollar pared earlier losses after the Chinese data was released and Moody’s Investors Service said it had upgraded the Asian nation’s government bond rating. The data “show solid improvement in China’s fundamentals,” said Mitul Kotecha, head of global currency strategy at Credit Agricole CIB in Hong Kong. “It helps risk appetite to some extent, which perhaps helps” the New Zealand and Australian currencies. New Zealand’s dollar rose to 78.60 U.S. cents as of 4:19 p.m. in Sydney from 78.29 cents in New York yesterday, when it advanced 0.7 percent. The so-called kiwi climbed 0.3 percent to 64.63 yen. The Australian currency traded at $1.0049 from $1.0053 yesterday, after earlier falling as much as 0.6 percent to 99.89 U.S. cents. The currency was at 82.62 yen from 82.72 yen. Asian Shares The MSCI Asia Pacific Index of shares rose 0.8 percent, snapping a two-day decline, and increasing the appetite for assets tied to growth. China’s industrial production advanced 13.1 percent and retail sales grew 18.6 percent in October from a year ago, the government reported in Beijing. Consumer prices rose 4.4 percent and producer prices gained 5 percent in October from a year ago, separate data showed. The People’s Bank of China yesterday raised lenders’ reserve requirements as cash from October’s larger-than-forecast $27.1 billion trade surplus threatened to add to the risk of asset bubbles. China is Australia’s largest trading partner and New Zealand’s second-biggest export market. The Australian dollar fell earlier after a government report showed the unemployment rate increased, overshadowing another that showed a gain in jobs. The jobless rate rose to 5.4 percent in October, from 5.1 percent the previous month, the statistics bureau said in Sydney. The number of people employed climbed 29,700 in October after rising 49,600 in September, the government also said. “When you get that many people searching for jobs and there’s only limited supply, what happens is the unemployment rate increases,” said Richard Grace, chief currency strategist in Sydney at Commonwealth Bank of Australia. “You might see a bit of selling involved, but I don’t think this is a game changer for the Australian dollar.” Australian bonds gained. The yield on the benchmark 10-year note fell two basis points to 5.34 percent, according to data compiled by Bloomberg. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, dropped two basis points to 3.92 percent. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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