June 28 (Bloomberg) -- The Australian dollar gained versus the greenback, rebounding from near an 11-week low, as rising Asian stocks spurred demand for higher-yielding assets.
The advance in the so-called Aussie versus the yen was tempered as Greece’s lawmakers debated tougher austerity measures that will determine whether the cash-strapped nation avoids default. New Zealand’s dollar weakened for a third day against Japan’s currency as economists said a report today will show an index of U.S. home prices fell in April, reducing demand for currencies linked to global growth.
“We’re seeing a buoyant day of trading in Asian equity markets and that’s pushing the Australian dollar back toward $1.05,” said Tim Waterer, a currency dealer at CMC Markets in Sydney. “Upside potential in the Aussie is likely to be capped until we navigate past the austerity vote in Greece this week.”
Australia’s dollar rose to $1.0473 at 11:49 a.m. in Sydney, from $1.0443 in New York yesterday, when it touched $1.0391, the least since April 12. The currency fetched 84.58 yen from 84.48 yen. New Zealand’s dollar was little changed at 80.51 U.S. cents and traded at 65.02 yen from 65.17 yen.
The MSCI Asia Pacific Index of stocks rose 0.9 percent.
Benchmark 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, attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.
--Editors: Nate Hosoda, Jonathan Annells
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