BLBG:Australian, N.Z. Dollars Advance to Three-Week Highs as Asian Stocks Rally
The Australian and New Zealand dollars advanced to the strongest level in more than three weeks as Asian stocks extended a rally from Europe, boosting demand for higher-yielding assets.
The so-called Aussie rose a fourth day versus the U.S. dollar after a report showed China’s service industries grew in December. The New Zealand currency strengthened against all its 16 major peers before U.S. data projected to show manufacturing in the world’s biggest economy expanded last month, increasing the allure of currencies linked to global growth.
“There’s a bit of optimism and a bit of risk appetite coming into the early part of the new year,” said Thomas Averill, managing director in Sydney at Rochford Capital, a currency and interest-rate risk-management company. “For the next week or so, they’re going to be fairly well supported,” he said, referring to the Australian and New Zealand currencies.
Australia’s dollar rose 0.6 percent to $1.0297 as of 4:10 p.m. in Sydney and climbed 0.6 percent to 79.12 yen. The New Zealand dollar added 0.9 percent to 78.50 U.S. cents and gained 0.8 percent to 60.32 yen. Both currencies touched their highest levels versus the greenback since Dec. 8.
The MSCI Asia Pacific Excluding Japan Index (MXAPJ) of shares rose 1.7 percent after the Stoxx Europe 600 Index added 1.1 percent yesterday. Japan’s financial markets are closed today for a holiday.
Australian government bonds declined, with benchmark (GACGB10) 10- year yields rising as much as 19 basis points, or 0.19 percentage point, to 3.85 percent, the highest since Dec. 14.
Manufacturing Reports
A Chinese purchasing managers’ index for non-manufacturing industries rose to 56 last month from 49.7 in November, the National Bureau of Statistics and the Federation of Logistics and Purchasing said today. A reading above 50 indicates expansion.
China was Australia’s biggest export market in October 2011, according to a report from Australia’s Department of Foreign Affairs and Trade.
A manufacturing index compiled by the Australian Industry Group and PricewaterhouseCoopers rose to 50.2 last month from 47.8 in November. It was the first time in six months the gauge exceeded the 50 level that divides expansion and contraction.
The Institute for Supply Management’s factory index (NAPMPMI) for the U.S. increased to 53.4 in December from 52.7 the previous month, according to the median estimate of economists in a Bloomberg News survey before the figures are released today.
Bets on Gain
Futures traders increased their bets that the Australian dollar will gain against the U.S. currency, figures from the Washington-based Commodity Futures Trading Commission showed. The difference in the number of wagers by hedge funds and other speculators on an advance in the Aussie compared with those on a drop was 32,637 on Dec. 27, up from 25,742 a week earlier.
Gains in the Australian and New Zealand currencies were limited by concern the prolonged sovereign-debt crisis in Europe will weigh on global economic growth.
German Chancellor Angela Merkel and French President Nicolas Sarkozy are scheduled to meet on Jan. 9 in Berlin to work out the details of stricter rules for controlling government spending. About 157 billion euros ($204 billion) in debt will mature in the 17-member euro area in the first three months of 2012, according to UBS AG.
“As you’ve seen, optimism has come and gone so frequently over the course of last six months, so I’m still remaining fairly cynical,” said Rochford’s Averill. Europe isn’t “any way close to a sustainable solution” to its debt crisis, he said.
To contact the reporter on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net
To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net
