BLBG:Aussie, N.Z. Dollars Rebound as U.S. Stock Futures Rise
The Australian and New Zealand dollars rallied as Standard & Poor’s 500 Index futures advanced, signaling the underlying gauge may halt a five-day drop, supporting demand for riskier assets.
New Zealand’s dollar rebounded from a one-month low against the yen after data showed business confidence improved in the first quarter, adding to signs the country’s economy remains resilient. The so-called Aussie earlier fell to the weakest in three months as commodities prices tumbled amid concern Europe’s debt crisis is worsening. Italy will sell up to 11 billion euros ($14.4 billion) of bills today.
“The Australian and New Zealand’s dollars are being bought back after yesterday’s selloffs,” said Takuya Kawabata, a researcher at Gaitame.com Research Institute Ltd. in Tokyo, unit of Japan’s largest currency-margin company. “While a positive business sentiment report alone may not drive the New Zealand dollar higher, we could see follow-through if economic data continue to improve and we start to see a tick up in consumer prices.”
Australia’s dollar earlier fell to $1.0226, the lowest since Jan. 9, before trading at $1.0281 at 2:15 p.m. in Sydney, 0.3 percent higher than yesterday’s close. It climbed 0.4 percent to 83.06 yen after it touched 82.49 yen, the weakest since Feb. 7. New Zealand’s currency rose 0.3 percent to 81.71 U.S. cents. The kiwi advanced 0.4 percent to 66 yen from yesterday, when it touched 65.60, the lowest since March 7.
In New Zealand, a net 13 percent of 797 companies surveyed expect the economy will improve over the next six months, from zero percent in the fourth-quarter survey, the New Zealand Institute of Economic Research Inc. said today in Wellington. The net figure subtracts the proportion of pessimists from optimists.
N.Z. Economy
“The New Zealand dollar is being torn between the negatives of the waning risk appetite and building domestic momentum,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “That tug-of-war continues and you’re likely to see the kiwi chopped around between the 80.90-82.50 range for the rest of the week.”
Should the New Zealand dollar stay above its March 6 low of 65.31 yen, the currency has scope to rebound this week toward 67, around its 12-day moving average, Gaitame.com’s Kawabata said, citing trading patterns.
The Australian dollar’s 14-day relative strength index versus the yen yesterday touched the 30 level that some traders see as signaling an asset may reverse direction.
Commodities Decline
Standard & Poor’s 500 Index futures added 0.3 percent. The MSCI Asia Pacific Index (MXAP) of stocks fell 0.7 percent following a 1.4 percent drop in the Thomson Reuters/Jefferies CRB Index (CRY) of raw materials yesterday.
“‘The big risk facing the New Zealand and Australian economies, and hence the Australian and New Zealand dollars, is a sharp fall in commodity prices,’’ said Bank of New Zealand’s Jones. ‘‘There’s more attention than usual on European bond auctions, given debt jitters are starting to flare up again.”
Italy’s 10-year yields rose 23 basis points to 5.69 percent yesterday, the highest level since Feb. 17. The nation will sell as much as 3 billion euros of 91-day bills and 8 billion euros of 361-day bills today. It is scheduled to auction bonds maturing in 2015, 2020 and 2023 tomorrow.
To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net;
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
