The Australian dollar touched its highest level in two months as euro-area finance ministers reached agreements on Greece’s debt burden and its funding gap.
The so-called Aussie advanced versus most of its 16 major counterparts as officials cut the indebted nation’s interest rates and gave it more time to pay back rescue loans. New Zealand’s currency, known as the kiwi, snapped a decline from yesterday as a fifth day of gains in Asian stocks outweighed a report today that showed the nation’s annual trade deficit widened to the most in more than three years.
“The initial market reaction to the agreement is positive, but we await further details to see if it’s a sustainable solution,” said Callum Henderson, Singapore-based global head of currency research at Standard Chartered Plc. “At the margin, this is good news for higher-yielding currencies” such as the Aussie and kiwi, he said.
Australia’s dollar rose 0.1 percent to $1.0479 at 5:09 p.m. in Sydney after earlier touching $1.0490, the highest since Sept. 21. It gained 0.4 percent to 86.24 yen. New Zealand’s currency traded at 82.34 U.S. cents, 0.2 percent above its close at 82.18 in New York. It bought 67.76 yen from 67.45.
Ten-year bond yields in Australia rose 2 1/2 basis points, or 0.025 percentage point, to 3.29 percent. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, advanced one basis point to 2.64 percent.
The MSCI Asia Pacific Index of shares gained 0.4 percent after rising 2 percent in the previous four days.
“All initiatives decided upon today will bring Greece’s public debt clearly back on a sustainable path,” Luxembourg Prime Minister Jean-Claude Juncker told reporters after chairing the meeting that began yesterday at 12:30 p.m. in Brussels. “This has been a very difficult deal.”
Officials from the 17-nation currency bloc cleared a 34.4 billion-euro ($45 billion) loan installment that Greece will receive in December, while dismissing for now calls for debt relief that may be needed in the longer term. The measures will help pare Greece’s debt from 190 percent of gross domestic product in 2014 to 124 percent of GDP in 2020, a target set by the International Monetary Fund as its condition for continuing to fund the program.
In New Zealand, figures released today showed imports exceeded exports by NZ$1.37 billion ($1.1 billion) in the 12 months ended Oct. 31, compared with a revised NZ$875 million shortfall in the year through September. That’s the widest gap since September 2009.