Australian, New Zealand Dollars Rise on Europe Debt Plan Relief Risk Rally
New Zealand’s dollar rose from a six-week low against its U.S. counterpart as stocks and commodities advanced amid optimism private bondholders will participate in Greece’s bailout.
The Australian dollar erased earlier losses against the greenback after a private report showed U.S. companies added more workers in February than the previous month. The Aussie’s gains were limited as a report showed the country’s economy grew slower than economists estimated. The kiwi’s rally from a six- week low comes before the central bank meets.
“I think the conditions are firmly in place for commodity currencies to outperform,” said Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp. (BK) “You have to just put the euro-zone situation aside because that of course has the potential to derail risk appetite generally.”
New Zealand’s dollar rallied 0.8 percent to 81.90 U.S. cents at 2:37 p.m. in New York. Yesterday it slid to as low as 81.01, a level not seen since Jan. 25. The so-called kiwi added 1.1 percent to 65.46 yen. It fell to 65.31 yesterday, the least since Feb. 16.
Australia’s dollar rose 0.2 percent to $1.0572. The Aussie climbed 0.5 percent to 85.79 yen. It earlier touched 84.81, the lowest since Feb. 22.
The Standard & Poor’s 500 Index (SPX) rose for the first time in four days, rallying 0.6 percent and the MSCI World Index of stocks gained 0.4 percent. The S&P 500 had fallen for three straight days in the biggest decline in 2012. The S&P GSCI Index (SPGSCITR) of 24 raw materials gained 0.7 percent.
Australia’s fourth-quarter GDP increased 0.4 percent in the final quarter of 2011. It was forecast to gain 0.8 percent, according to the median of 25 estimates in a Bloomberg News survey. The economy expanded a revised 0.8 percent in the previous quarter, which was weaker than previously reported, a Bureau of Statistics figures showed today.
The Australian dollar may weaken against its New Zealand counterpart as the currency has become overvalued and foreign purchases of government debt diminish, according to Nomura Securities Inc.
Investors with holdings of at least 120 billion euros ($158 billion), or 58 percent, of the Greek bonds eligible for the nation’s debt swap have agreed to sign on, according to data compiled by Bloomberg from company reports and government statements. The Greek government has set a 75 percent participation rate as a threshold for proceeding with the transaction.
U.S. companies added 216,000 jobs in February, and a revised 173,000 payrolls the previous month, according to ADP Employer Services. That compares to an estimated 215,000 additional jobs, according to a Bloomberg News survey and a previous reading of 170,000.
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