- RBA says currency `adjusting' to decline in commodity prices
- China's non-manufacturing PMI climbs from previous month
The Australian dollar climbed to a five-week high after the Reserve Bank of Australia refrained from cutting interest rates and a report showed an improvement in China’s services industry.
The Aussie was the second-best performer among Group-of-10 currencies this quarter, with only the New Zealand dollar climbing more, after the RBA kept its benchmark at a record-low 2 percent at a policy meeting Tuesday and said Australia’s currency is “adjusting” to a slump in commodity prices. Data earlier showed the contribution of net exports to gross domestic product increased more than economists forecast in the third quarter and activity in China’s non-manufacturing industry reached a four-month high in November.
“The Aussie’s a little volatile around the release of the statement, but the main trend today is a weaker U.S. dollar against most currencies,” said Joseph Capurso, a strategist in Sydney at Commonwealth Bank of Australia. There was “no mention that the Aussie dollar is too high relative to commodity prices,” he said.
The Australian currency rose to 72.84 U.S. cents, the highest since Oct. 23, before trading at 72.65 as of 3:37 p.m. in Tokyo from 72.27 on Monday. The Aussie has strengthened 3.5 percent this quarter, rallying from a slump that pushed it to a six-year low of 68.96 on Sept. 7. The kiwi has climbed 3.8 percent during the period to 66.38 U.S. cents.
China’s non-manufacturing purchasing managers index rose to 53.6 in November from 53.1 a month earlier, staying above the level of 50 that divides expansion from contraction. The figure outweighed the drop in manufacturing PMI to the weakest level in more than three years. The nation is Australia’s largest trading partner.
“Markets are coming around to the idea that with the non-manufacturing side of it improving, China’s at least moving in the correct direction,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland.