Aussie Dollar Rises as Investors Take on Risk
The Australian and New Zealand dollars rose against their U.S. counterpart as stocks advanced amid increased demand for higher-yielding assets after the European Union said it may renegotiate Greece’s bailout.
The Aussie reached its highest point in more than a month after the Reserve Bank of Australia said in minutes released June 18 that recent domestic data hadn’t shown a “significant weakening” compared with the prior month’s forecasts. The New Zealand dollar strengthened for a fourth day.
“It’s just a generally risk-on type of environment, with the dollar weaker across the board,” Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York, said in a telephone interview. “The risk-sensitive or high-beta currencies like the Australian and New Zealand dollars typically do well in those types of environments.”
Australia’s dollar gained 0.6 percent to $1.0189 yesterday in New York. The currency traded 0.4 percent stronger at 80.44 yen.
New Zealand’s dollar climbed 0.8 percent to 79.82 U.S. cents. It rose 0.6 percent to 63.02 yen.
Stocks gained, boosting the MSCI Emerging Markets Index 1 percent to its highest point in five weeks. The Standard & Poor’s GSCI Index of 24 raw materials rallied 0.8 percent.
The RBA lowered interest rates by 25 basis points to 3.5 percent this month after a “finely balanced” discussion that the domestic economy was holding up as global prospects worsened, minutes of its June 5 meeting showed.
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