BLBG:Australia’s Dollar Trades Near Highest Since November Before Jobs Report
Australia’s dollar rose toward its strongest level in 2 1/2 months before a report tomorrow forecast to show employers added jobs in December, boosting demand for the nation’s assets.
The so-called Aussie advanced for a second day against the U.S. currency after a private survey showed Australian consumer confidence rebounded in January. New Zealand’s dollar climbed to its strongest since November versus the greenback as homes sales increased and prices stayed near the highest since 2008. Demand for both South Pacific nations’ currencies was bolstered after a hedge-fund manager on a creditors’ committee for Greece said the country is nearing a deal on its debt.
“We could get a lift in the short term for the Aussie on the back of the jobs data, which is likely to be relatively strong,” said Jim Vrondas, a manager at the online foreign- exchange dealer OzForex Ltd. in Sydney. “When risk comes on the table again, the Aussie will go higher, but that would probably be a good opportunity to sell.”
Australia’s dollar rose 0.2 percent to $1.0401 at 4:00 p.m. in Sydney from $1.0376 in New York yesterday when it touched $1.0450, the most since Nov. 1. The currency was little changed at 79.74 yen. New Zealand’s dollar advanced 0.4 percent to 80.31 U.S. cents and earlier touched 80.37, the most since Nov. 1. It gained 0.1 percent to 61.57 yen.
The number of people employed in Australia rose by 10,000 last month after a decline of 6,300 in November, the statistics bureau will probably say, according to the median estimate in a Bloomberg News survey of economists. The jobless rate is forecast to remain unchanged at 5.3 percent.
Consumer Confidence
A sentiment index in the nation rose 2.4 percent to 97.1, after falling 8.3 percent in December, according to a Westpac Banking Corp. (WBC) and Melbourne Institute survey taken Jan. 9-13 of 1,200 consumers published today. The reading was boosted by a 9.5 percent gain in the sub-index tracking opinions on economic conditions over the next year, said Bill Evans, Westpac’s chief economist.
“Given ongoing financial turmoil in Europe, a flat housing market and further weakness in the labor market, sentiment is likely to have been lower without the rate cuts,” Evans said in an e-mailed statement.
Traders are betting on a 64 percent chance the Reserve Bank of Australia will cut its benchmark rate to 4 percent from 4.25 percent when policy makers meet Feb. 7, according to Bloomberg calculations based on cash-rate futures.
Higher benchmark rates in Australia and New Zealand, where the key rate is 2.5 percent and compares with near zero rates in the U.S. and Japan, attract investors to the two nations’ assets.
Australia’s 10-year bond yield fell three basis points, or 0.03 percentage points, to 3.76 percent. The MSCI Asia Pacific Index (MXAP) of stocks rose 0.5 percent.
N.Z. House Prices
New Zealand’s dollar rose against most major peers after a report showed house prices in the nation were little changed near their highest since 2008 last month.
The Real Estate Institute of New Zealand Inc.’s index of house prices fell 0.1 percent to 3,301.4 in December, according to an e-mailed statement today. The number of transactions rose 21 percent from a year earlier to 5,316, making the most active December in four years, the institute said.
Scope for Raising
“You’ve got the positive domestic developments occurring in the context of improved risk environment, so the double- whammy is helping kiwi,” said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. “The housing recovery and improvement in the export sector suggest there’s scope for the Reserve Bank to move its official cash rate target off emergency levels and the market’s just not priced for that.”
New Zealand’s dollar will extend gains if it closes above its 200-day moving average near 80.37 cents, said Trinh. The currency will probably advance toward NZ$1.22 per Aussie over the next three to six months from NZ$1.2951 today, she said.
Greece is nearing a deal with private creditors that would give them cash and securities with a market value of about 32 cents per euro of government debt, Bruce Richards, chief executive officer of New York-based Marathon Asset Management LP, said yesterday in an interview with Bloomberg Businessweek.
Marathon is on the committee of 32 private creditors that formed in November to negotiate with Greece, the International Monetary Fund and the European Union. It’s not a member of the smaller steering committee directly involved in negotiations. The talks, under the auspices of the Institute for International Finance, broke off Jan. 13 and are scheduled to resume today in Athens.
To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
