N.Z., Australian Dollars Strengthen Amid Bets on Global Growth

The Australian and New Zealand dollars gained versus most major currencies as commodities rose after the Bank of Japan (8301) said it would expand monetary stimulus, fueling bets the global economy will expand.

The Aussie’s gained before a report forecast to show the nation’s consumer prices rose 2.4 percent in the fourth quarter from a year earlier. The two South Pacific currencies fell against the yen as it rose against all of its 16 most-traded peers after the BOJ’s announcement of open-ended asset purchases starting in January 2014 disappointed investors who expected bolder action sooner. Asian and U.S. stocks rose.

“A positive session for risk, with most stocks and commodities notching solid gains, added to the Aussie and kiwi’s upbeat tone,” Joe Manimbo, a market analyst at Western Union Business Solutions, said via e-mail.

New Zealand’s dollar, nicknamed the kiwi, rose 0.6 percent to 84.10 U.S. cents in New York trading yesterday and touched 84.31 cents, the strongest level since Jan. 15. The kiwi fell 0.4 percent to 74.60 yen.

The Australian dollar gained 0.5 percent to $1.0566 and touched $1.0579, the highest since Jan. 16, and fell 0.5 percent to 93.73 yen.

Standard & Poor’s GSCI Index of 24 raw materials increased 0.5 percent. The S&P 500 Index rose 0.4 percent, and the MSCI AC Asia Pacific Index gained 0.5 percent.

BOJ Decision

The BOJ said yesterday it will buy 13 trillion yen ($146.6 billion) in assets a month starting next year 2014 and set a 2 percent inflation target. Prime Minister Shinzo Abe, who took office last month, has called for “bold monetary policy” to defeat deflation and drive the yen lower.

Australia’s consumer price index rose 2.4 percent in the fourth quarter from a year earlier, a Bloomberg survey of economists forecast a Bureau of Statistics report will show today. Prices gained 0.4 percent from the third quarter, economists projected.

The Aussie dollar has increased 2.1 percent this month among the 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes. The kiwi has gained 1.9 percent, and the U.S. dollar is up 0.2 percent. The yen has lost 2.2 percent.

To contact the reporter on this story: Taylor Tepper in New York at ttepper2@bloomberg.net

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.