SF: Australian Dollar Rises for 1st Time in 3 Days as Stocks Advance
Nov. 15 (Bloomberg) -- The Australian dollar rose for the first time in three days as the nation's stocks advanced and traders bought the currency betting last week's decline to a two-week low was overdone.
New Zealand's dollar also gained after retail sales unexpectedly climbed in the third quarter, adding to signs the country's economic recovery is stabilizing. Both South Pacific nations' currencies fell last week amid concern European nations will struggle to raise funds and China will expand measures to curb inflation, slowing growth. China is Australia's largest trading partner and New Zealand's second-biggest export market.
"Equity strength is providing some support for the Aussie dollar," said Tim Waterer, a foreign-exchange dealer at CMC Markets in Sydney. "We could see some bargain hunters stepping in with views of the Aussie getting back above parity."
Australia's currency rose 0.5 percent to 98.92 U.S. cents as of 11:19 a.m. in Sydney from last week in New York. It reached 98.25 cents on Nov. 12, the least since Nov. 1. The currency gained 0.4 percent to 81.57 yen.
New Zealand's dollar advanced 0.2 percent to 77.60 cents after touching 76.99 cents on Nov. 12, the least since Nov. 2. The currency gained to 63.96 yen from 63.83.
Australia's S&P/ASX 200 Index rose 0.3 percent.
N.Z. Retail Sales
The so-called kiwi rose after Statistics New Zealand said retail sales, adjusted for inflation, increased 0.7 percent from the second quarter. Economists forecast no change, according to the median estimate of a Bloomberg News survey.
"The retail sales number was better than expected" and signals "modest" gross domestic product growth for the third quarter, said Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington.
Benchmark interest rates are 4.75 percent in Australia and 3 percent in New Zealand, compared with as low as zero in the U.S. and Japan, attracting investors to the South Pacific nations' higher-yielding assets. The risk in such trades is that currency market moves will erase profits.
