Aussie, N.Z. Dollars Rise as Fed Adopts More Monetary Stimulus

The Australian and New Zealand dollars rose against their U.S. peer after the Federal Reserve added to its monetary-stimulus program, renewing concern the measures will debase the U.S. currency.

Australia’s dollar strengthened to almost a three-month high versus the greenback after the U.S. central bank said it will buy an additional $45 billion of Treasuries a month. The New Zealand dollar traded at its highest level in more than four years versus the yen as the country’s Liberal Democratic Party, which has pledged fiscal stimulus, leads in polls before Dec. 16 elections. Reserve Bank of Australia Governor Glenn Stevens delivered a speech in Bangkok yesterday.

Stevens’ comments suggest that “Asian economic rebalancing hints at an outlook that is supportive of commodity demand, and thus the Australian dollar,” Eric Theoret, a currency strategist in Toronto at Bank of Nova Scotia (BNS)’s Scotia Capital unit, wrote yesterday in a note to clients.

Australia’s currency appreciated 0.3 percent to $1.0555 yesterday in New York, after rising to $1.0586, its highest level since Sept. 14. It rose 1.2 percent to 87.88 yen.

The New Zealand dollar, nicknamed the kiwi, increased 0.5 percent to 84.36 U.S. cents. The kiwi climbed 1.4 percent to 70.24 yen, its highest level since October 2008.

The MSCI Asia Pacific Index (MXAP) rose 0.5 percent. The Standard & Poor’s GSCI Index of raw materials rose 0.8 percent.

New Zealand’s dollar has strengthened 6.3 percent this year, the biggest increase among the 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes. The Aussie has gained 0.7 percent, and the U.S. dollar has fallen 2.9 percent.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

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

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