BLBG:Australian, N.Z. Dollars Strengthen on Job Reports; Yen Advances
The Australian and New Zealand dollars rose as government reports showed job gains in the two nations exceeded economists’ estimates, damping speculation their central banks will reduce interest rates.
The so-called kiwi strengthened against all 16 of its major counterparts after employers added the most workers on record in the last quarter and the unemployment rate fell to a three-year low. The yen gained as a decline in Asian stocks spurred demand for the safety of Japan’s currency. The pound was 0.4 percent from the strongest in almost three months against the dollar on speculation the Bank of England will refrain from expanding monetary stimulus at a policy meeting today.
“There’s a lot of short positioning in the Australian dollar from the speculative community, so that does make the exchange rate susceptible to a squeeze,” said Andrew Salter, a currency strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Sydney. A short squeeze is where traders are forced to buy back a security after placing a bet it would decline. “This employment data is a good catalyst.”
Australia’s dollar jumped 0.6 percent at $1.0235 at 8:31 a.m. London time after falling to $1.0155 on May 7, the weakest level since March 4. New Zealand’s currency strengthened 0.7 percent to 84.56 U.S. cents.
The yen gained 0.3 percent to 129.84 per euro after depreciating to 131.12 on April 11, the weakest since January 2010. Japan’s currency gained 0.3 percent to 98.76 per dollar. The euro was little changed at $1.3148.
Australian Jobs
The number of people employed in Australia rose by 50,100 in April from a month earlier, more than four times economists’ estimates, and the jobless rate unexpectedly fell to 5.5 percent, the statistics bureau said. New Zealand employers added a record 38,000 jobs last quarter and its unemployment dropped to 6.2 percent. Economists forecast 6.8 percent.
The yen advanced versus 13 of its 16 major peers as the MSCI Asia Pacific Index of shares slid 0.3 percent, reversing a gain of as much as 0.4 percent.
The yen has weakened 20 percent against the dollar in the past six months amid speculation of expanded monetary easing by Bank of Japan, which doubled bond purchases to counter deflation. The decline has stalled since the currency fell to 99.95 per dollar on April 11, the weakest since October 2008.
The pound was little changed at $1.5546 after rising to $1.5606 on May 1, the strongest since Feb. 13.
The BOE’s (UKAPTARG) Monetary Policy Committee will keep its target for bond purchases at 375 billion pounds today, according to all except one of 44 economists surveyed by Bloomberg News. The majority on the nine-member panel last month said monetary policy was already “highly stimulatory,” according to minutes of their April 3-4 meeting released April 17.
To contact the reporters on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net.
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net.
