Australian, N.Z. Dollars Rise as Manufacturing Signals Economic Recovery
The Australian and New Zealand dollars rose, reversing earlier declines, after manufacturing in China, Europe and the U.S. expanded, signaling the global economy is recovering.
The South Pacific nations’ currencies gained, driving the New Zealand dollar to a four-month high against its U.S. counterpart, as stocks and commodities rose amid demand for higher-yielding assets. The purchasing managers’ index for Chinese manufacturing rose to 50.5 in January from 50.3 the previous month, above the level of 50 that marks the division between contraction and expansion.
“We reacted to the Chinese PMI,” said Fabian Eliasson, head of U.S. currency sales at Mizuho Financial Group Inc. in New York. “It helps the commodity currencies. The risk currencies are reacting positively on that news.”
Australia’s dollar rose 1.1 percent to $1.0735 at 11:54 a.m. in New York after earlier falling as much as 0.5 percent. It reached $1.0740, the highest since Oct. 27. The Aussie gained 0.9 percent to 81.71 yen. New Zealand’s currency strengthened 1 percent to 83.48 U.S. cents and touched 83.53, the highest level since Sept. 9. The so-called kiwi added 0.8 percent to 63.54 yen.
Europe’s Markit Economics said its manufacturing gauge based on a survey of purchasing managers in the euro region rose to 48.8 in January from 46.9 in December.
In the U.K., manufacturing returned to growth in January after shrinking in the previous three months, a report showed.
U.S. manufacturing expanded at the fastest pace since June. The Institute for Supply Management’s manufacturing index rose to 54.1 in January from 53.1 in December, the group said today.
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