- Currency is best performer among greenback’s 16 major peers
- New Zealand’s kiwi climbs, halting two-day, 0.7% decline
Australia’s dollar headed for its biggest gain in seven weeks after a government report showed exports added more to the economy in the first quarter than analysts forecast.
The Aussie was the best performer among the U.S. currency’s 16 major counterparts after the statistics bureau said net exports contributed 1.1 percentage points to gross domestic product, more than the 0.7 point increase forecast in a Bloomberg survey of economists. Australia’s dollar gained for a second day after data also showed building approvals unexpectedly rose in April, before the Reserve Bank of Australia sets monetary policy next week. New Zealand’s currency rallied from a two-day decline.
“It’s quite a strong set of results,” said Joseph Capurso, a senior currency strategist in Sydney at Commonwealth Bank of Australia. “It does reduce the chances that the RBA cuts rates next week. It’s going to support Aussie for a little while longer.”
The Aussie rose 0.9 percent to 72.49 U.S. cents as of 1:53 p.m. in Sydney from Monday, heading for the biggest gain since April 12. The kiwi advanced 0.6 percent to 67.32 U.S. cents, after losing 0.7 percent in the past two days.
The RBA, which will set interest rates on June 7, unexpectedly cut its benchmark to a record 1.75 percent on May 3. There’s a 66 percent chance it will lower it at least once more by the year-end, interest-rate swaps indicate.
The report on Australia’s first-quarter growth is due to be released on Wednesday.
“The big part is there was a huge surge in exports in the quarter,” said Commonwealth Bank’s Capurso. “We’ll be seeing analysts revise up their estimates in GDP for the first quarter which comes out tomorrow morning.”