Policy makers in Australia, New Zealand and Japan face the threat that the $5.3 trillion a day global foreign exchange market will derail their efforts to deliver sustainable economic growth.
Central bank chiefs Glenn Stevens, Graeme Wheeler and Haruhiko Kuroda are struggling to rein in surging demand for their nations’ assets as their currencies climbed this week with investors focused on falling volatility and Japanese stocks. The kiwi and Aussie led gains among 31 major peers since June 6 while the yen is poised for its strongest week since early April. One-month implied volatility for Australia’s dollar slid its lowest level since 1996 yesterday, prompting traders to ignore this year’s 32 percent drop in prices for iron ore, the nation’s biggest export.
