March 22 (Bloomberg) -- The Australian dollar touched the highest in more than a week and New Zealand’s currency rose versus the greenback as Asian stocks advanced and higher prices for commodities boosted demand for higher-yielding assets.
New Zealand’s dollar was also bolstered after the International Monetary Fund said the nation’s central bank may need to raise interest rates “relatively quickly” once the economy begins to recover. Australia’s currency held above $1 per greenback for a second day as oil maintained yesterday’s advance after allied forces expanded their air campaign over Libya.
“The situation in the Middle East is putting upward pressure on the price of gold and oil, and that in isolation benefits commodity-bloc currencies,” said Tim Waterer, a foreign-exchange dealer with CMC Markets in Sydney. “The stock market reaction to the Libyan actions over the past few days has been quite positive as there’s a hope there will be a quick resolution.”
Australia’s currency rose 0.5 percent to $1.0112 at 12:04 p.m. in New York from $1.0063 yesterday. The Aussie touched $1.0129, the highest since March 11. It gained 0.4 percent to 81.89 yen from 81.54 yen. New Zealand’s dollar rose 0.7 percent to 74.10 U.S. cents from 73.57 cents and increased 0.7 percent to 60.02 yen from 59.61 yen.
Crude oil rose 1.3 percent to $103.68 per barrel in electronic trading on the New York Mercantile Exchange. It touched $103.80 per barrel, the highest since March 14, as the airstrikes threatened to prolong a supply disruption.
The Reuters/Jefferies CRB Index of raw materials increased 0.1 percent. Raw materials account for a majority of exports from Australia and New Zealand. The MSCI Asia Pacific Index gained 2.2 percent.
New Zealand’s economy will grow 1 percent this year before earthquake rebuilding boosts the expansion to 4 percent in 2012, the IMF said as part of an annual review of the country’s economy.
The Reserve Bank of New Zealand’s half percentage-point cut in the official cash rate to 2.5 percent this month was appropriate, the fund said. The rate could be lifted “relatively quickly” should inflation pressures mount, it said.
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