The Australian and New Zealand dollars traded near 12-week highs on speculation European Union finance ministers meeting in Brussels are making headway on measures to resolve the region’s sovereign-debt crisis.
The so-called Aussie and kiwi rose yesterday after French Finance Minister Francois Baroin said negotiations between Greece and its private creditors are making tangible progress. Demand for the higher-yielding currencies increased before U.S. data this week forecast to show economic growth is accelerating.
“There’s certainly a lot of hope and a reasonable amount of optimism that deals will be forthcoming” in Europe, said Robert Rennie, Sydney-based chief currency strategist at Westpac Banking Corp. “The Australian dollar is starting to look overpriced on most, if not all metrics, but it’s not clear to me if there’s any catalyst out there that is going to push it lower.”
The Australian currency traded at $1.0525 as of 10:47 a.m. in Sydney, unchanged from yesterday’s close in New York. It yesterday climbed as high as $1.0573, the strongest since Oct. 31. The Aussie was at 81.03 yen from 81.06 yesterday, when it advanced for a fifth-straight day.
New Zealand’s dollar fetched 81.11 U.S. cents from 81.01 yesterday, when it reached 81.42, also the highest since Oct. 31. It was at 62.44 yen from 62.41.
U.S. gross domestic product increased at a 3 percent annual rate in the fourth quarter, according to the median forecast of economists in a Bloomberg News survey before the Commerce Department’s Jan. 27 report. That compares with a 1.8 percent advance in the previous three-month period. Other reports this week may show gains in new-home sales and durable goods orders, separate polls show.
Gains in the South Pacific currencies were limited as a technical indicator signaled recent gains may have been excessive. The New Zealand dollar’s 14-day relative strength index against the greenback yesterday reached the 70 level that some traders see as a signal that an asset may be about to reverse direction. The index for the Aussie is at 68.
-- Editors: Benjamin Purvis, Naoto Hosoda