The Australian dollar fell before U.S. data forecast to show orders for durable goods rose in April, adding to signs of a sustained recovery in the world’s largest economy and diminishing the need for monetary stimulus.
The Aussie is set for a third weekly decline amid speculation a strengthening U.S. economy will prompt the Federal Reserve to pare back on its bond-buying program. New Zealand’s dollar declined, trimming this week’s advance, after a government report showed the nation’s trade surplus for April was less than economists estimated.
“There’s a lot of negative sentiment around the Aussie,” said Peter Dragicevich, a Sydney-based currency economist at Commonwealth Bank of Australia, the nation’s largest lender. “The discussion has shifted toward when will the Fed taper its asset purchases,” boosting the U.S. dollar, he said.
The Australian dollar fell 0.7 percent to 96.78 U.S. cents as of 5:09 p.m. in Sydney after yesterday touching 95.94, the least since June 1. It fell 1 percent to 98.46 yen.
The kiwi declined 0.4 percent to 81.05 U.S. cents and yesterday fell as low as 80.06, the weakest since Sept. 7. It slid 0.7 percent to 82.43 yen. Against the Aussie, it rose 0.4 percent to NZ$1.1940, the most since October 2009.
For the week, Australia’s currency has declined 0.5 percent versus the greenback and the kiwi is up 0.5 percent.
Volatility in Japan’s equity and bond markets is driving demand for the yen, Dragicevich said.
U.S. orders for durable goods climbed 1.5 percent last month from a revised 6.9 percent drop in March, Commerce Department data may show today, according to economists surveyed by Bloomberg News. Fed Chairman Ben S. Bernanke said this week the central bank may taper monthly bond purchases if it’s confident of sustained gains in the economy.
New Zealand had a trade surplus of NZ$157 million ($127 million) in April, less than the median estimate of NZ$515 million in a Bloomberg survey.
HSBC Holdings Plc altered forecasts for the Aussie and kiwi as the U.S. dollar gains amid efforts by central banks to weaken their currencies, according to a research note e-mailed today. Australia’s dollar will fall to 90 U.S. cents by Dec. 31, while New Zealand’s will trade at 78 cents, the bank said, compared with previous forecasts for 95 and 74 respectively.
Goldman Sachs Group Inc. said yesterday it remained bearish on the Aussie, expecting it to fall to 90 cents in 12 months. The bank’s top long-term recommendation is to position for a weaker Australian dollar versus Norway’s krone, targeting a move to 5 per Aussie from 5.64 today.
“We do not anticipate that stronger global growth will translate into higher commodity prices, therefore Australian dollar performance can decouple from global growth,” Hong Kong-based Fiona Lake wrote in a note to clients. “We expect the Australian economy to lag rather than lead the global pick-up.”
Aussie one-month implied volatility was 11.06 percent after yesterday reaching 11.3 percent, the most since June 26.
Australia’s 10-year bond yield rose one basis point, or 0.01 percentage point, to 3.31 percent, the highest since April 11. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates which is sensitive to interest-rate expectations, was little changed at 2.915 percent.