Aussie Dollar Remains Higher as Banks Safe Amid Cyprus Turmoil

The Australian dollar remained higher, maintaining three weeks of gains, as investors speculated the nation’s banks will be untouched by concerns in Europe that bank deposits are under threat.

New Zealand’s currency traded 0.1 percent from its highest this month even as markets awaited a decision on whether Cyprus will receive the bailout needed to avert financial collapse. The Cypriot parliament rejected a tax on all bank accounts on the island last week, forcing the nation to hunt for other sources to contribute to the rescue package.

“You saw a bit of safe-haven buying last week and, given that our bank ratings are still among the highest in the world, investors are looking favorably on Australia and New Zealand,” said Tim Kelleher, ASB Institutional, a unit of Commonwealth Bank of Australia in Auckland. “The likes of Canada and Australia, and as a result New Zealand, would probably see an influx of deposits if things worsen in Europe and that would be supportive for the currencies.”

The Australian dollar bought $1.0450 as of 9:52 a.m. in Sydney from $1.0444 in New York last week, when it gained 0.3 percent. It rose as high as $1.0460 on March 22, the strongest since Jan. 30. The Aussie fetched 98.83 yen from 98.67 on March 22. New Zealand’s currency bought 83.55 U.S. cents from 83.58 in New York and touched 83.63 cents on March 22, the most since Feb. 25. It bought 79.03 yen from 78.97.

Westpac Banking Corp. (WBC) and Commonwealth Bank of Australia, the nation’s two largest lenders, are the biggest publicly traded banks worldwide to hold a credit score of AA- or higher from Standard & Poor’s, the ratings company’s fourth-highest grade, according to data compiled by Bloomberg.

Futures traders boosted bets the Australian dollar will rise against the greenback by the most in nine months.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the Australian dollar compared with those on a drop -- so-called net longs -- was 54,055 on March 19, compared with net longs of 23,266 a week earlier, figures from the Washington-based Commodity Futures Trading Commission show.

To contact the reporter on this story: Candice Zachariahs in Sydney at

To contact the editor responsible for this story: Rocky Swift at

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