Aussie, Kiwi Strengthen for a Third Day on Global Stimulus BetsKevin Buckland
The Australian and New Zealand dollars rose for a third day against the greenback on bets that stimulus by the world’s major central banks will push money into the South Pacific nations’ higher-yielding assets.
New Zealand’s kiwi dollar held a weekly gain against the yen after the Bank of Japan reiterated its pledge to double the monetary base in two years to end 15 years of deflation, without announcing further steps. New Zealand’s currency gained for a third day against its Australian counterpart after data showed exports in the smaller nation rose more than forecast. Australia’s bonds rose for the first time in three days.
“With the Bank of Japan, the Fed, the ECB to a degree, and the Bank of England as well, all looking to step up easing measures, it makes Australia and New Zealand quite attractive,” said Janu Chan, a Sydney-based economist at St. George Bank Ltd., referring to the Federal Reserve and European Central Bank. “Money needs to go somewhere.”
The so-called Aussie rose 0.3 percent to $1.0321 as of 4:34 p.m. in Sydney, adding to a 0.3 percent gain over the past two days. It dropped 0.3 percent to 101.89 yen.
The New Zealand dollar advanced 0.4 percent to 85.30 U.S. cents after a 1.2 percent rise in the previous two sessions. It declined 0.2 percent to 84.21 yen.
For the week, Australia’s currency has risen 0.4 percent against the dollar and fallen 0.4 percent against the yen. The kiwi has gained 1.3 percent versus the greenback and 0.5 percent against the yen.
The BOJ’s board met today for the first time since announcing unprecedented monetary easing on April 4. It forecast a so-called core inflation of 1.9 percent in fiscal 2015, excluding sales tax effects.
The benchmark interest rate is as low as zero in Japan, matching the U.S. That compares with 3 percent in Australia and 2.5 percent in New Zealand.
The New Zealand dollar has gained 6 percent over the past six months, the best performer among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. Its Australian counterpart has risen 1.3 percent. The U.S. dollar strengthened 1.9 percent. The yen has tumbled 20 percent, the biggest drop on the indexes.
The kiwi rose for a third day against the Aussie as New Zealand’s quarterly exports to China surpassed those to Australia for the first time.
The total value of shipments rose to NZ$4.4 billion ($3.8 billion) in March from NZ$3.9 billion the previous month, the statistics bureau reported today. Overseas sales to China jumped 32 percent, while those to Australia fell to a five-year low.
The trade surplus widened to NZ$718 million, compared with the median economist estimate of a NZ$470 million surplus in a Bloomberg News survey. New Zealand’s currency gained 0.2 percent to NZ$1.2092 per Australian dollar, taking its advance this week to 0.9 percent.
The yield on Australia’s 10-year government bond slid four basis points to 3.16 percent.