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Best G-10 Currency Rally Fueled by Yield Hunt as Fed Doubts Grow

  • Kiwi advances for seventh day after reaching May 2015 high
  • Milk prices drive gains as New Zealand rate-cut odds recede
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New Zealand’s dollar rose for a seventh day versus the greenback, its best winning streak since June, as bets the Federal Reserve will move slowly in raising interest rates enhanced the allure of the highest-yielding developed-market currency.

The kiwi has outperformed its Group-of-10 peers this month and strengthened toward parity with the Australian dollar as milk prices recovered. The probability that the Reserve Bank of New Zealand will cut its key rate this month from a record low has dropped to 20 percent from 33 percent in mid August, interest-rate swaps show. Asset-purchase programs from Japan to the euro area have kept borrowing costs low worldwide, with most economists predicting that the European Central Bank will extend quantitative easing for a second time when policy makers meet Thursday.