Aussie, N.Z. Dollars Rally After U.S. Budget Deal Wins ApprovalJoseph Ciolli
The Australian and New Zealand dollars climbed against their U.S. counterpart after lawmakers in Washington passed a budget bill to avert the so-called fiscal cliff threatening the world’s biggest economy.
Australia’s currency rose against most of its major peers, touching its strongest level in two weeks, as the budget deal spurred demand for riskier assets. The New Zealand dollar also reached a two-week high even as Republicans vowed to fight President Barack Obama for spending cuts in exchange for raising the U.S. debt ceiling.
The Aussie “advanced on relief after American lawmakers reached a last-minute deal to stave off the worst of the fiscal-cliff measures of tax increases and spending cuts,” Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., wrote yesterday in a note to clients.
The Australian currency appreciated 1.1 percent to $1.0504 yesterday in New York after advancing as much as 1.2 percent, its biggest increase since June 29, to $1.0524, the strongest level since Dec. 19. It gained 1.8 percent to 91.74 yen.
New Zealand’s dollar, nicknamed the kiwi, added 0.8 percent to 83.41 U.S. cents and touched 83.97 cents, the highest since Dec. 19. The kiwi climbed as much as 1.9 percent to 73.13 yen, the strongest level since September 2008.
The Standard & Poor’s GSCI Index of raw materials rose 0.9 percent, and the S&P 500 Index surged 2.5 percent.
New Zealand’s dollar strengthened 4.4 percent over the past year, the biggest increase after Norway’s krone among 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes. The Aussie fell 0.5 percent, and the U.S. dollar slid 3.2 percent.