Australia Dollar Rises to Three-Week High on China Rebound Signs

The Australian dollar rose to a three-week high after data yesterday showed China’s exports increased more than estimated, adding to signs the world’s second-largest economy is rebounding.

The Aussie gained versus all of its 16 major peers before data this week forecast to show inflation in China slowed while industrial production grew at the fastest pace since December. Tony Abbott led the Liberal-National coalition to victory in federal elections held Sept. 7, ending six years of rule by the Labor Party. Australia’s 10-year bond yields fell from a 17-month high.

“The Aussie lifted mainly because of the Chinese trade balance data,” said Joseph Capurso, a Sydney-based currency strategist at Commonwealth Bank of Australia. (CBA) “If the Chinese data that come out today and tomorrow are better than we think, the Aussie will probably get another leg up.”

Australia’s currency added 0.1 percent to 91.90 U.S. cents at 9:53 a.m. in Sydney from Sept. 6, after earlier touching 92.21, the highest since Aug. 19. The Aussie jumped 1 percent to 91.92 yen. It rose 0.3 percent to NZ$1.1518.

New Zealand’s dollar slid 0.3 percent to 79.79 U.S. cents. It earlier reached 80.34, the strongest since Aug. 20. The kiwi dollar gained 0.7 percent to 79.81 yen.

The yield on Australia’s benchmark 10-year bond declined 4 1/2 basis points, or 0.045 percentage point, to 4.1 percent from the end of last week, when it touched 4.16 percent, the highest since April 2012.

China Economy

In China, overseas shipments rose 7.2 percent from a year earlier, the General Administration of Customs said in Beijing yesterday. That compares with the 5.5 percent median estimate of economists surveyed by Bloomberg News and July’s 5.1 percent gain. Imports rose a less-than-estimated 7 percent, leaving a trade surplus of more than $28 billion.

National Bureau of Statistics figures due today may show consumer prices rose 2.6 percent in August, compared with a 2.7 percent gain in July, according to the median estimate of economists in a Bloomberg poll. Industrial production may have gained 9.9 percent from a year earlier in NBS data out tomorrow, the most this year outside of months distorted by the Chinese New Year holiday.

China’s economy will maintain sustained, healthy growth, Premier Li Keqiang wrote in a commentary published in the Financial Times. China is the biggest trading partner for both Australia and New Zealand.

In Australia, Abbot is pledging to cut red tape and lower taxes to boost the $1.5 trillion economy after his coalition won the biggest parliamentary majority since at least 2004.

-- Editors: Jonathan Annells, Rocky Swift

To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net;

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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