Australian Dollar Rises on Central-Bank Minutes Before Wage Data

The Australian dollar strengthened versus all but one of its 16 most-traded peers after the central bank in the minutes of its last meeting lowered expectations for an interest-rate cut.

The Aussie gained for a second day against the U.S. dollar before data forecast today to show Australian wages rose, according to a Bloomberg News survey. The New Zealand dollar had the biggest intraday drop versus the yen in a week as a Japanese official said its government doesn’t intend to buy foreign bonds to end deflation by weakening the currency.

“The Reserve Bank of Australia stated the weakened domestic outlook for the Australian economy had already been answered by 175-basis-points worth of rate cuts by the central bank to date,” Ravi Bharadwaj, a market analyst at Western Union Business Solutions, a unit of Western Union Co., wrote in a note to clients. “The minutes implied the RBA would assume a wait-and-see approach to monetary policy in the near term, disappointing investors who wished for a more aggressive, dovish message.”

The Aussie strengthened 0.5 percent to $1.0356 yesterday in New York. It gained 0.1 percent to 96.91 yen.

The New Zealand dollar, nicknamed the kiwi, gained 0.2 percent to 84.68 U.S. cents and dropped 0.2 percent to 79.25 yen after falling as much as 0.8 percent, the most since Feb. 12.

Standard & Poor’s GSCI Index of 24 raw materials decreased 0.1 percent.

RBA Minutes

The Aussie gained versus the U.S. dollar after minutes of the Reserve Bank of Australia’s Feb. 5 meeting published yesterday said prices of many metals, coal and crude oil have benefited from the better global outlook.

Governor Glenn Stevens and his board, who kept the benchmark rate unchanged at 3 percent this month, said the local currency’s strength doesn’t reflect the significant decline in the nation’s terms of trade.

Australian wages rose 0.8 percent in the fourth quarter from the previous three months, according to a Bloomberg survey of 21 analysts. That is 0.1 percentage point higher than the most recent Australian Bureau of Statistics report in September.

Japanese officials have toned down calls for a weaker yen to help exporters after trade partners complained the nation risked setting off a currency war.

The Australian dollar has gained 0.2 percent and the kiwi has climbed 3.1 this year among 10 developed-nation currencies tracked by the Bloomberg Correlation-Weighted Indexes. The U.S. dollar has added 0.7 percent and the yen, the biggest decliner, has lost 7.4 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

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