Aussie Climbs on Home Loans, China Data; Kiwi Dollar Retreats

Australia’s dollar rose, extending its biggest weekly gain in a month, following reports showing faster-than-estimated growth in the nation’s home-loan approvals and Chinese exports.

The Aussie rose to a three-week high as a government report today showed inflationary pressure in China remained subdued. Australia’s bonds rose, pushing the 10-year yields down from a 17-month high, after Tony Abbott led the Liberal-National coalition to victory in federal elections on Sept. 7. New Zealand’s dollar weakened after data showed the country’s manufacturing slowed.

“Improving financial conditions or lower interest rates are certainly starting to generate more demand for housing” in Australia, said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. in Singapore. “The recent pickup in Chinese economic activity is not really feeding into strong inflation pressures. That and better headlines for Australian data are leaving us wanting to buy dips in the Aussie dollar.”

Australia’s dollar added 0.2 percent to 92.04 U.S. cents at 4:29 p.m. in Sydney from Sept. 6, when it posted a 3.2 percent weekly gain, the biggest since the five days ended Aug. 9. The Aussie earlier touched 92.21, the highest since Aug. 19. The currency added 0.7 percent to 91.69 yen. It rose 0.3 percent to NZ$1.1516.

New Zealand’s dollar fell 0.1 percent to 79.91 U.S. cents. It earlier reached 80.34, the strongest since Aug. 20. The kiwi dollar gained 0.4 percent to 79.62 yen.

The yield on Australia’s benchmark 10-year bond declined seven basis points, or 0.07 percentage point, to 4.07 percent from the end of last week, when it touched 4.16 percent, the highest since April 2012.

China’s Economy

China’s overseas shipments rose 7.2 percent in August from a year earlier, the General Administration of Customs said in Beijing yesterday. That compares with the 5.5 percent median estimate of economists surveyed by Bloomberg News and July’s 5.1 percent gain.

Figures today showed Chinese consumer prices rose 2.6 percent in August from a year earlier, in line with economist forecasts. The nation, which is the biggest trading partner for both Australia and New Zealand, will maintain sustained, healthy growth, Premier Li Keqiang wrote in a commentary published in the Financial Times.

Home Loans

In Australia, the number of loans granted to build or buy houses and apartments rose 2.4 percent in July from the previous month, when they rose a revised 2.6 percent, the statistics bureau said in Sydney today. The median estimate in a Bloomberg survey of economists was for approvals to increase 2 percent.

The Reserve Bank of Australia left rates at record low 2.5 percent last week and omitted a reference to scope for further stimulus.

Abbott is pledging to cut red tape and lower taxes to boost the economy after his coalition won the biggest parliamentary majority since at least 2004.

Australia’s top AAA rating is unaffected by the change of government, according to Standard & Poor’s, which cited the nation’s significant fiscal and monetary flexibility, economic resilience, and public policy stability. The new government will shortly commission a review of finances, which may pave the way for further spending cuts, S&P said in a statement.

In New Zealand, a gauge of manufacturing sales volume decreased 3.4 percent in the second quarter from the previous three months, the statistics office in Wellington said today.

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