Australian Dollar Rises Third Day Amid Bond Offering; Kiwi Drops

Australia’s dollar rose for a third straight day against its U.S. counterpart as the government’s sale of its longest-ever bond maturity signaled strong demand for the South Pacific country’s debt.

Money-market rates in China, Australia’s biggest trade partner, dropped for a second day yesterday on speculation cash supply will increase as the central bank adds funds to the financial system. New Zealand’s dollar, nicknamed the kiwi, weakened versus most major peers as global stocks declined amid lower risk appetite.

“You had a better-than-expected government bond sale in Australia,” Ravi Bharadwaj, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., said in a telephone interview. “You also have a backdrop of expectations that Chinese authorities will do what’s needed to boost local demand.”

The Australian dollar appreciated 0.3 percent to $1.0234 yesterday in New York. It touched $1.0149 on Oct. 8, the lowest since July 13. The Aussie rose 0.2 percent to 80.02 yen.

New Zealand’s dollar, nicknamed the kiwi, declined 0.2 percent to 81.63 U.S. cents and reached 81.46 cents, the lowest level since Sept. 11. The kiwi fell 0.3 percent to 63.83 yen.

The MSCI World Index (MXWO) of equities retreated 0.6 percent after Alcoa Inc. said slowing growth in China will cut global demand for aluminum.

Bond Sale

Australia’s A$3.25 billion ($3.3 billion) of notes due in April 2029 priced to yield 3.595 percent, the country’s Office of Financial Management said. That compares with 3.24 percent on the U.K.’s July 2052 gilt, the highest rate outside Australia among sovereign debt with top credit scores from all three major ratings companies.

The offering matched the amount of April 2027 bonds sold in October 2011. Australia’s previous longest bond was the 2027 line.

The nation’s benchmark cash rate target is 3.25 percent, compared with a range of zero to 0.25 percent in the U.S.

To contact the reporter on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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