Australian Dollar Advances Before Unemployment Report This Week
The Australian dollar rose after touching the lowest level in almost three months before a report this week that may show unemployment increased, fueling speculation the reserve bank will reduce its key rate next month.
The Aussie erased losses versus the majority of its 16 major peers as Treasurer Wayne Swan said on Oct. 7 that reduced interest rates will help Australia weather deteriorating conditions in the world economy. New Zealand’s dollar, nicknamed the kiwi, gained after its biggest weekly drop in more than four months.
“The leading indicators for the labor market continue to look weak and the Reserve Bank of Australia noted the softening of conditions in its last post-meeting statement,” analysts led by Peter von Maydell, global head of foreign-exchange strategy at Credit Suisse Group AG, wrote today in a note to clients. “The projected rise in the unemployment rate is likely to reinforce the RBA’s dovish bias.”
The Australian dollar appreciated 0.1 percent to $1.0190 yesterday in New York after falling as much as 0.4 percent to $1.0149, the lowest since July 13. It decreased 0.4 percent to 79.81 yen.
New Zealand’s dollar, nicknamed the kiwi, rose 0.1 percent to 81.92 U.S. cents after earlier declining 0.4 percent. It fell 0.3 percent to 64.16 yen.
The kiwi has strengthened 3.6 percent this year, the biggest increase among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The Aussie has fallen 2.5 percent and the greenback is down 2.3 percent.
The Standard & Poor’s 500 Index (SPX) and the S&P GSCI Index of raw materials each dropped 0.4 percent.
Australia’s unemployment rate probably climbed to 5.3 percent last month from 5.1 percent in August, according to the median estimate of economists surveyed by Bloomberg News before the Oct. 10 report. Payrolls probably increased by 5,000 in September from the previous month, when they fell by 8,800, another survey showed.
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