Aussie Gains for Third Day After Longest-Dated Bond Sale
Australia’s dollar advanced for a third day after the nation sold its longest-dated debt in three decades, boosting demand for the country’s assets.
The so-called Aussie gained versus all but one of its 16 major counterparts after prices for iron ore, Australia’s biggest export, surged to a two-month high. Demand for the currency was tempered before a report tomorrow that may show unemployment climbed to the highest in three months. New Zealand’s dollar, nicknamed the kiwi, dropped as Asian stocks followed a slide in global equities.
“Demand for Australian bonds is supporting the currency,” said Lee Wai Tuck, currency strategist at Forecast Pte in Singapore. “But I think interest is still to sell the Aussie on rallies.”
The Australian dollar rose 0.2 percent to $1.0226 at 4:21 p.m. in Sydney. It added 0.2 percent to 79.99 yen. New Zealand’s currency dropped 0.1 percent to 81.72 U.S. cents. It bought 63.92 yen, 0.1 percent lower than the close in New York.
Australia’s 10-year note yield rose two basis points to 3.09 percent. New Zealand’s swap rate, a fixed payment made to receive floating rates, was unchanged at 2.625 percent.
The MSCI Asia Pacific Index (MXAP) of shares declined 0.7 percent. The Standard & Poor’s 500 Index fell 1 percent yesterday.
Australia today sold A$3.25 billion ($3.3 billion) of 3.25 percent notes due in April 2029, according to an e-mailed statement from the Australian Office of Financial Management. The security has the longest maturity on record in AOFM data going back to 1982. Today’s sale matches the government’s largest ever offering.
Physical iron ore with 62 percent content at the Chinese port of Tianjin jumped 6.2 percent yesterday to $117.20 a ton, the highest close since Aug. 1, according to The Steel Index Ltd. China is Australia’s biggest trading partner and New Zealand’s second-biggest export destination.
The jobless rate in Australia probably rose to 5.3 percent in September from 5.1 percent in the previous month, according to the median estimate of economists surveyed by Bloomberg News before the statistics bureau releases the report tomorrow. If confirmed, that would be the highest since June.
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