The Australian dollar strengthened against all of its most-traded counterparts as Federal Reserve minutes showed a few policy makers said more stimulus may be needed, adding to demand for higher-yielding currencies.
The Aussie was the biggest gainer yesterday against the U.S. dollar and the yen and rose to a record versus the euro. New Zealand’s currency also rose against most of its major counterparts as commodities gained and a report showed consumer confidence in Australia reached a five-month high. The minutes from the U.S. central bank’s June meeting showed a few officials thought a third round of the asset purchasing program known as quantitative easing would likely be needed to boost the economy.
“People were looking for signs that QE3 is coming and people were slightly adding riskier currencies,” said John Curran, a senior vice president at CanadianForex Ltd., an online foreign-exchange dealer in Toronto.
The Australian dollar gained as much as 0.7 percent to A$1.19354 per euro yesterday in New York. The Aussie climbed 0.6 percent to $1.0251 and rose 1 percent to 81.77 yen.
The New Zealand dollar, nicknamed the kiwi, gained 0.3 percent to 79.65 U.S. cents and appreciated 0.7 percent to 63.53 yen.
The Thomson Reuters-Jefferies CRB Index of raw materials rose 0.7 percent to 290.79, led by a gain in oil.
An index of Australian consumer sentiment advanced 3.7 percent in July to 99.1, the highest level since February, according to a report yesterday from Westpac Banking Corp. and the Melbourne Institute. Data released earlier this month showed retail sales increased in May and home-building approvals climbed by a record.
Australian Treasurer Wayne Swan announced new currency talks with China, the nation’s biggest trading partner, about direct exchange between the Aussie and the yuan, also called the renminbi. He said yesterday that while he is in Hong Kong and Beijing this week he will discuss the possibility of “direct convertibility at some stage in the future between the Australian dollar and the renminbi for transactions completed in mainland China, without pricing through the U.S. dollar.”