The Australian and New Zealand dollars rose to record highs against the euro after the European Central Bank joined the People’s Bank of China and the Bank of England in increasing stimulus to boost economic growth.
The Aussie strengthened against all but one of its 16 most- traded peers as Chinese policy makers cut their key interest rate for the second time in a month. New Zealand’s dollar gained to the highest level against its U.S. counterpart in two months. The ECB lowered its benchmark rate to a record 0.75 percent, and the BOE expanded its asset-purchase stimulus program by 50 billion pounds ($78 billion) to 375 billion pounds.
“The global central-bank response has been positive for risk assets and commodities because central banks continue their commitment to the stabilization of financial markets generally,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia in Toronto. “That provides some reassurance to investors.”
Australia’s dollar climbed 1.2 percent to A$1.2045 per euro yesterday in New York, after touching A$1.2022 earlier, the strongest since the 17-nation currency was created in 1999. The Aussie rose 0.1 percent to $1.0287 and gained 0.2 percent to 82.22 yen.
New Zealand’s currency, nicknamed the kiwi, appreciated 1.1 percent against the euro to NZ$1.5422 after reaching a record NZ$1.5382. It was little changed at 80.35 U.S. cents. The kiwi traded at 64.22 yen.
China remained Australia’s top trading partner in May, with transactions climbing to A$11.1 billion ($11.4 billion), the most since October, according to figures released yesterday by the Australian Bureau of Statistics.
Exports to China climbed to A$7.3 billion in May, the report showed. That’s the most ever in data compiled by Bloomberg dating back to 1988.
New Zealand Prime Minister John Key said China may eventually surpass Australia as his country’s biggest export market as Asia’s economies drive growth while Europe struggles.
New Zealand’s free-trade agreement with China has been “hugely successful” since it was signed in 2008, Key said in response to a question after a speech in Sydney yesterday.
To contact the reporter on this story: Lindsey Rupp in New York at email@example.com
To contact the editor responsible for this story: Dave Liedtka at firstname.lastname@example.org