Aussie Holds Biggest Gain in Week on Speculation Drop Too Quick
Australia’s dollar held its biggest gain in a week against the greenback amid speculation the South Pacific currency may have fallen too fast.
The Aussie rebounded yesterday from near its lowest in three years. Traders increased bets last week that it will weaken further to a record. Declines in New Zealand’s kiwi dollar were limited after business confidence rose to the highest in almost four years. A survey of Australian business confidence is also due today.
“A lot of people were looking at 90 U.S. cents as a real break level in Aussie, and the fact that we couldn’t get through told the market a little about demand for new selling,” said Sam Tuck, a senior foreign-exchange manager at ANZ Bank New Zealand Ltd. in Auckland. “That was enough to give people pause, with the aim to attempt lower later, when there are further reasons.”
The Australian dollar was little changed at 91.21 U.S. cents at 9:56 a.m. in Sydney from yesterday, when it gained 0.7 percent, the most since July 1. It touched 90.37 on July 3, the lowest since September 2010. New Zealand’s currency fell 0.2 percent to 77.88 U.S. cents.
The difference in the number of wagers by hedge funds and other large speculators on a decline in the Australian dollar compared with those on a gain -- so-called net shorts -- was a record 70,515 on July 2, figures from the Washington-based Commodity Futures Trading Commission show.
New Zealand business confidence rose in the second quarter to the highest since the period ended September 2009. The New Zealand Institute of Economic Research’s poll climbed to 32, from 23 in the first three months of the year.
National Australia Bank Ltd. releases its monthly survey of business confidence today. The gauge improved to -1 in May from the month before.
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