Bloomberg News

Aussie, Kiwi Rise as U.S. Data, Spain Auction Buoy Risk Demand

December 15, 2011

Dec. 15 (Bloomberg) -- The Australian and New Zealand dollars rose against the U.S. currency and the yen as better U.S. economic data and easing concern European funding stress was deepening increased demand for higher-yielding assets.

Reports in the U.S. showed New York-region manufacturing expanded and claims for unemployment benefits dropped, adding to speculation the economic recovery is quickening. Spain sold more than its maximum target at a debt auction, buoying stocks and assets linked to growth. The Aussie and kiwi dropped earlier after commodity prices slumped.

“We had a very significant calming in European credit markets and the U.S. data was pretty good, which is underpinning the risk sentiment,” said Boris Schlossberg, director of research at online currency trader GFT Forex in New York. “All of that is contributing to the notion that the world is not coming to an end tomorrow.”

The Australian dollar rose 0.3 percent to 99.35 U.S. cents at 1:11 p.m. in New York after earlier falling as much as 0.5 percent. The currency was little changed at 77.35 yen.

New Zealand’s currency added 0.5 percent to 75.42 U.S. cents after touching 74.62 cents, the weakest since Nov. 28. It rose 0.3 percent to 58.74 yen.

Stocks, Commodities

The MSCI World Index of equities advanced 0.5 percent while the Thomson Reuters/Jefferies CRB Index of raw materials fell as much as 0.4 percent.

Spain sold 6.03 billion euros ($7.9 billion) of bonds today, compared with the maximum target of 3.5 billion euros the Treasury set for the auction. The yield on the security due in April 2021, which acts as the 10-year benchmark, was 5.545 percent, compared with 5.433 percent when it was last auctioned on Oct. 20. The nation also sold debt due in 2016 and 2020.

The Federal Reserve Bank of New York’s general economic index rose to 9.5, from 0.6 in November. Economists projected the gauge would rise to 3, based on the median of 55 forecasts in a Bloomberg News survey. A separate report showed that the number of applications for unemployment benefits dropped last week to 366,000, the lowest level in three years, showing the U.S. labor market is healing.

--Editors: Paul Cox, Kenneth Pringle

To contact the reporters on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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