Australia’s dollar rose to a six-week high against New Zealand’s before a report forecast to show the jobless rate fell in the larger South Pacific nation, fueling speculation the central bank will raise interest rates.
The Aussie strengthened against its New Zealand counterpart, nicknamed the kiwi, after reports showed Australian home-loan approvals increased in October and New Zealand construction declined. Both currencies dropped for a third day against the greenback as the extra yields offered by their bonds over Treasuries tumbled. Economists said New Zealand will keep its benchmark interest rate unchanged tomorrow. The Reserve Bank of Australia kept its key rate at 4.75 percent on Dec. 6.
“The focus is very much on the employment figures out tomorrow, more so as an indicator as to when the RBA may move in the new year,” said Tim Waterer, a foreign-exchange dealer at CMC Markets in Sydney. “There’s increased buying interest in the Aussie.”
Australia’s currency rose 0.7 percent to NZ$1.3076 at 11:43 a.m. in New York, from NZ$1.2980 yesterday. It earlier touched NZ$1.3097, the strongest since Oct. 27.
The Aussie depreciated 0.7 percent to 97.64 U.S. cents, from 98.29 cents yesterday, and slipped 0.2 percent to 82.24 yen, from 82.07 yen. New Zealand’s dollar dropped 1.4 percent to 74.69 U.S. cents, and weakened 0.5 percent to 62.90 yen from, 63.21 yen.
Australian employers added 20,000 jobs in November, taking the jobless rate down to 5.2 percent from 5.4 percent in the previous month, according to a Bloomberg News survey before a statistics bureau report due to be released at 7:30 p.m. New York time. Home-loan approvals rose 1.9 percent in October from the previous month, the bureau said today, outpacing the forecast for no change in a separate Bloomberg survey.
New Zealand’s currency weakened against 15 of its 16 major counterparts after the government said manufacturing sales volumes shrank 1.4 percent in the third quarter. The value of residential construction fell 5.3 percent from the previous three months, excluding inflation, a separate report showed.
The extra yield investors get from buying Australia’s two-year government debt instead of similar-dated Treasuries shrank to 4.24 percentage points, near the 4.22 percentage points touched on Dec. 2 that was the narrowest since Sept. 16.
The premium offered by three-year government debt in New Zealand over the U.S. contracted to 3.13 percentage points, the least since June.