Bloomberg News

Aussie Reaches Three-Week High on Eased European Debt Concern

June 03, 2011

June 3 (Bloomberg) -- Australia’s dollar reached a three- week high against its U.S. counterpart as concern eased that the European sovereign-debt crisis will drag down demand for higher- yielding assets.

The Aussie gained for a third week after people with knowledge of the situation said Grupo Modelo SAB de CV and Molson Coors Brewing Co. are exploring a possible joint bid for Foster’s Group Ltd., Australia’s biggest brewer. New Zealand’s dollar trimmed a weekly drop after data showed U.S. employers hired the fewest workers in eight months, backing the case for the Federal Reserve to keep interest rates near zero and preserve the yield advantage of assets in the smaller nation.

“There’s a bit of easing in worries over the debt crisis in Europe,” said Lee Wai Tuck, a currency strategist at Forecast Pte. in Singapore. “The bias is for commodity currencies such as the Aussie to be bought.”

Australia’s dollar appreciated 0.5 percent to $1.0725 at 3:11 p.m. in New York, from $1.0670 yesterday, and touched $1.0775, the highest level since May 11. It strengthened 0.2 percent for the week. The Aussie declined 0.3 percent to 86.02 yen, from 86.31 yen.

New Zealand’s dollar, nicknamed the kiwi, gained 0.2 percent to 81.73 U.S. cents, from 81.56 cents yesterday. It reached a record high 82.64 U.S. cents on May 31. The kiwi pared its five-day loss to 0.2 percent as U.S. Labor Department data showed U.S. payroll growth declined to 54,000 new jobs in May from a revised 232,000 in April.

Kiwi Versus Yen

The kiwi fell versus the yen 0.6 percent on the day and 0.9 percent on the week to 65.56.

Benchmark interest rates are 4.75 percent in Australia and 2.5 percent in New Zealand, compared with as low as zero in the U.S. and Japan.

European Union and International Monetary Fund officials agreed to pay the next installment to Greece under last year’s 110 billion-euro ($161 billion) bailout, paving the way for an upgraded aid package, according to Luxembourg’s Jean-Claude Juncker, who leads the group of euro-area finance ministers.

--With assistance from Allison Bennett in New York. Editors: Greg Storey, Dennis Fitzgerald

To contact the reporter on this story: Ron Harui in Singapore at

To contact the editor responsible for this story: Dave Liedtka at

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