The Australian currency gained against most of its major peers on speculation the price of gold may rise on increased demand from global central banks.
Australia’s dollar erased an earlier loss against the greenback after the Bureau of Resources and Energy Economics announced gold exports will increase 9 percent in the year starting July 1 as volatility in the U.S. dollar and the euro increase demand. The New Zealand currency rose even after data showed the nation’s annual trade deficit in May was the widest in more than two years.
The South Pacific nations’ currencies “tend to be higher beta, so if you see this increase in risk aversion or the deteriorating environment, then it’s going to be hard for them to sustain much of a rally,” said David Grad, a foreign-exchange strategist at Bank of America Corp. in New York. “That’s going to weigh on them going forward.” High-beta currencies tend to have the greatest volatility.
The Aussie advanced 0.2 percent to $1.0080 yesterday in New York. It rose 0.4 percent to 80.36 yen.
The so-called kiwi climbed 0.1 percent to 79.17 U.S. cents and gained 0.3 percent to 63.12 yen.
Gold may average $1,660 an ounce, 6 percent higher than over the last year, the bureau said. Exports from Australia will increase 361 metric tons in the year beginning July 1, it said, maintaining its March forecast. Several countries including Russia, Turkey, Ukraine and Kazakhstan have already boosted their bullion imports, according to data on the International Monetary Fund’s website.
Gold for immediate delivery advanced to $1,577.50 an ounce in New York.
New Zealand had a trade deficit of NZ$805 million ($636 million) in the 12 months ended May 31, the most since November 2009, Statistics New Zealand said. The currency has fallen 3.3 percent since the end of March and is set for the first quarterly decline since September.