June 8 (Bloomberg) -- The Australian dollar rose above parity with the U.S. currency for the first time in three weeks after China cut its key interest rates, fueling appetite for riskier assets.
The Aussie erased gains versus the greenback after Federal Reserve Chairman Ben S. Bernanke refrained from signaling additional steps the central bank might take to spur growth. The New Zealand dollar strengthened against the yen for a fourth straight day as stocks and commodities advanced.
“The market has been so short over the last couple of weeks that it was pretty ripe for a snapback,” said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc., a currency brokerage. “The less bullish than expected comments from Bernanke prompted a little bit of the steam to come out of that rally.” A short position is a bet that an asset will decline in value.
Australia’s dollar fell 0.3 percent to 98.94 U.S. cents at 5 p.m. in New York yesterday, after earlier rising 0.8 percent to $1.0003. The currency traded 0.2 percent stronger versus the yen at 78.79 yen.
New Zealand’s dollar declined 0.5 percent to 76.72 U.S. cents. It rose 0.1 percent to 61.09 yen.
China’s benchmark one-year deposit rate will drop by 0.25 percentage point effective tomorrow, the People’s Bank of China said on its website. The one-year lending rate will also be cut by 0.25 percentage point, it said.
The MSCI Asia Pacific Index of shares advanced 1.3 percent, bolstering investor appetite for riskier assets.
The Aussie was also buoyed after the nation’s payrolls jumped by 38,900 in May, the statistics bureau said yesterday, while economists surveyed by Bloomberg News forecast no change.
The data followed an official report on June 5 that showed the nation’s gross domestic product expanded 1.3 percent in the first three months of this year from the fourth quarter, twice the pace economists estimated.
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