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Aussie, N.Z. Dollars Advance as Commodities Rally on U.S. Data

Aug. 16 (Bloomberg) -- The Australian dollar gained against its U.S. counterpart for the first time in four days as commodities rallied on signs of improvement in the world’s largest economy.

The Australian and New Zealand dollars rose against the majority of their 16 most-traded peers as the appetite for higher-yielding assets increased. The Aussie declined earlier after a private survey showed the nation’s consumer confidence fell amid prospects the Reserve Bank of Australia will keep interest rates unchanged.

“A bump in commodity prices -- commodities go up, commodity currencies go up,” John Doyle, director of markets in Washington at currency-trading firm Tempus Consulting Inc., said in a telephone interview. “The retail data was pretty good, all things considered, and the industrial production number.”

The Aussie rose 0.2 percent to $1.0505 yesterday in New York. The currency advanced 0.5 percent to 82.98 yen.

New Zealand’s dollar, nicknamed the kiwi, gained for the first time in three days, adding 0.2 percent to 80.71 U.S. cents. It climbed 0.5 percent to 63.76 yen.

The S&P GSCI gauge of 24 commodities gained 1 percent and crude-oil futures increased 0.9 percent to $94.27 a barrel in New York.

Federal Reserve data showed U.S. industrial production increased 0.6 percent in July, after a revised 0.1 percent gain in June that was smaller than previously reported. Economists in a Bloomberg News survey forecast a 0.5 percent rise. U.S. retail sales yesterday rose for the first time in four months.

Kiwi Weakening

The kiwi may weaken against its U.S. counterpart to its lowest level in three weeks if it breaks a key support level, according to UBS AG, citing technical indicators.

New Zealand’s currency is approaching support at 80.16 U.S. cents, Richard Adcock, head of fixed-income technical strategy at UBS in London, wrote yesterday in a note to clients. If the currency falls below this level, it could see near-term depreciation to 79.67, he said. Support refers to a level on a price graph where technical analysts anticipate orders to buy an asset.

The kiwi may also depreciate versus the Australian dollar to NZ$1.3080, its July low, according to Adcock. If this level is breached, the currency could decline to NZ$1.3179, its Dec. 27 low, he wrote.

To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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