The Australian dollar rose to the strongest in more than eight months versus the yen as German ZEW investor confidence climbed, spurring demand for riskier assets.
New Zealand’s dollar gained to the strongest in nine months versus the U.S. currency as 48 of 49 economists surveyed by Bloomberg News expect the Federal Reserve to announce tomorrow it will expand its balance sheet. The gains in the Aussie were limited after a report yesterday showed the nation’s business confidence plunged to the lowest level since 2009.
“The ZEW report was a bit of a relief to the market for a short-term risk bid,” said Samarjit Shankar, a managing director for the foreign-exchange group in Boston at Bank of New York Mellon. “Investors for today are willing to give risk the benefit of the doubt.”
Australia’s dollar gained 0.4 percent to $1.0529 in New York yesterday, touching strongest since Sept. 17. It rallied as much as 0.7 percent to 86.94 yen, the highest since March 28, before trading at 86.89 yen.
New Zealand’s dollar advanced to 0.5 percent to 83.93 U.S. cents, reaching the strongest since March 2. The kiwi rallied as much as 0.8 percent to 69.28 yen, the strongest since May 4.
Futures traders pushed net bets the Australian dollar will rise against the greenback to a record 92,229 contracts in the week ended Dec. 4.
The ZEW Center for European Economic Research in Mannheim said its index of German investor and analyst expectations climbed to 6.9 this month from minus 15.7 in November. Economists forecast a gain to minus 11.5, according to a Bloomberg News survey.
In Australia, the confidence index dropped to minus 9 from minus 1 in October, according to a National Australia Bank Ltd. survey. The business conditions gauge, a measure of hiring, sales and profits, held at minus 5, the weakest level since May 2009.