Aussie, Kiwi Dollars Rise as Global Risk Appetite RecoversKevin Buckland
The Australian and New Zealand dollars rose versus the greenback as gold rallied from the biggest drop in three decades, reviving appetite for risk.
The South Pacific nations’ currencies rebounded from weekly losses as monetary stimulus from the U.S. to Japan increased demand for higher-yielding assets. New Zealand’s kiwi dollar gained against all but two of its 16 most-traded counterparts after data showed net immigration almost doubled.
“The fact that we seem to have put that gold flash crash behind us is helping people’s nerves,” supporting demand for the Aussie and kiwi, said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp. “The ongoing money printing by major central banks is also helping.”
The so-called Aussie gained 0.1 percent to $1.0285 as of 5:09 p.m. in Sydney, after earlier touching $1.0266, the lowest since March 11. It fell 2.2 percent last week, the biggest drop since May. The kiwi rose 0.2 percent to 84.32 U.S. cents, rebounding from a 2 percent decline last week.
Australia’s dollar rose 0.3 percent to 102.62 yen, while its New Zealand counterpart gained 0.4 percent to 84.16 yen.
Gold for immediate delivery rose as much as 1.7 percent. The metal’s five-day advance is the longest run since December, after a 9.1 percent plunge on April 15 that was the biggest since 1983.
Asian stocks gained for a second day, with the MSCI Asia Pacific Index adding 0.6 percent.
Demand for higher-yielding assets was supported after Group of 20 finance ministers meeting in Washington backed the Bank of Japan’s stimulus efforts, aimed at ending 15 years of deflation.
“Winning international understanding gives me more confidence to conduct monetary policy appropriately,” BOJ Governor Haruhiko Kuroda told reporters after the meeting that ended April 19. “We will continue our qualitative and quantitative easing for the next two years.”
The BOJ pledged at its April 4 policy meeting to double the monetary base in two years through expanded purchases of government bonds. The policy board meets again on April 26.
In the U.S., the Federal Reserve is buying $85 billion of bonds a month in the third round of its quantitative-easing strategy to spur growth.
Benchmark interest rates are 3 percent in Australia and 2.5 percent in New Zealand, compared with as low as zero in the U.S. and Japan.
Futures traders have placed a record number of bets that the New Zealand dollar will gain against the greenback, figures from the Washington-based Commodity Futures Trading Commission showed last week. The difference in the number of wagers by hedge funds and other large speculators on an advance in the kiwi compared with those on a drop -- so-called net longs --rose to 30,808 on April 16.
The New Zealand dollar has climbed 6 percent in the past six months, the biggest gainer among the 10 currencies tracked by the Bloomberg Correlation-Weighted Indexes. The Australian dollar has risen 2 percent.
Australia has lost A$7.5 billion ($7.7 billion) in revenue since the October mid-year budget review due to its strong currency and lower terms of trade, worsening its budget position, Treasurer Wayne Swan said yesterday.
New Zealand’s permanent net migration rose 1,220 in March, according to Statistics New Zealand in Wellington. Arrivals exceeded departures by 2,542 in the year ended March 31, while net departures to Australia was the lowest since September 2010.
“Migration in New Zealand tends to be influenced by trans-Tasman movement -- kiwis going to Australia to work, and coming back,” said Imre Speizer, Callow’s Auckland-based colleague at Westpac. “Over the last few months they’ve been coming back, and that’s a positive for the kiwi dollar, and a negative for Aussie.”
The Aussie fell as much as 0.2 percent to NZ$1.2178 before trading little changed at NZ$1.2198.