The New Zealand and Australian dollars gained to the highest levels in almost one month as reports showed building permits rose in both countries and before data forecast to show Chinese manufacturing strengthened. The so-called kiwi gained to its strongest in three weeks against the yen after New Zealand’s home-building permits in July had the biggest jump since April 2008. Both currencies advanced as Asian stocks rose for a fourth day, boosting demand for higher-yielding assets. The building report “adds further evidence that the New Zealand economy is showing further resilience to the economic downturn globally,” said Mitul Kotecha, head of global currency strategy in Hong Kong at Credit Agricole CIB. “Short term, we see positive risk appetite helping to boost the New Zealand dollar and Aussie.” New Zealand’s dollar gained 0.8 percent to 85.22 U.S. cents as of 12:28 p.m. in Sydney after earlier touching 85.36, the most since Aug. 4. It advanced to 65.52 yen from 65.02 and rose to as high as 65.63, the strongest since Aug. 8. Australia’s dollar traded at $1.0671 from $1.0656 and earlier rose to $1.0686, the most since Aug. 4. The currency climbed 0.2 percent to 82.03 yen. New Zealand’s currency rose against all of its 16 major peers after the nation’s statistics bureau said home-building permits increased 13 percent. Approvals are accelerating after dropping to a two-year low in February, when the country’s deadliest earthquake in eight decades struck the South Island city of Christchurch. Australian Permits The number of permits granted to build or renovate houses and apartments in Australia climbed 1 percent from June, the first increase in four months, the Bureau of Statistics said in Sydney. The New Zealand dollar rose 1.9 percent in the past week against nine developed nations’ currencies tracked by Bloomberg Correlation-Weighted Currency Indexes. The Australian dollar gained 1.2 percent. New Zealand’s currency strengthened 0.6 percent to NZ$1.2521 per Aussie and reached NZ$1.2503, the highest level since Aug. 16, after the permits data report. The MSCI Asia Pacific Index of stocks rose 1.5 percent and Standard & Poor’s 500 futures signaled U.S. stocks may extend yesterday’s gains. Eyes on China China’s manufacturing growth quickened to 51 in August from 50.7 the previous month, the Purchasing Managers’ Index due Sept. 1 is predicted to say, according to the median economist estimate in a Bloomberg News survey. China is Australia’s largest trading partner and New Zealand’s second-biggest export market. “I will concentrate all my eyes on China: They’re buying my stocks, they’re buying my iron ore, they’re buying my copper,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc., Japan’s biggest brokerage. “I think the Aussie and kiwi will do very well against the dollar, but they will do much better against the euro.” Swaps traders have pared bets on Australian interest-rate cuts, with a Credit Suisse Group AG index signaling 1.17 percentage points of reductions over the next 12 months, compared with the 1.28 indicated last week. “Australia’s dollar has also been boosted by the paring of rate-cut expectations in the aftermath” of last week’s testimony to parliament by Reserve Bank of Australia Governor Glenn Stevens, John Kyriakopoulos, Sydney-based head of currency strategy at National Australia Bank Ltd wrote in a research note today. To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net

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