Dec. 16 (Bloomberg) -- The New Zealand dollar advanced for a second day as Asian equities extended a global rally, supporting demand for higher-yielding assets.
The Australian and New Zealand dollars rebounded from two- week lows yesterday after reports added to signs the U.S. economy is gaining momentum even as Europe struggles to contain its debt crisis. Gains in the so-called Aussie were limited before the Reserve Bank of Australia releases minutes next week of its Dec. 6 meeting when the central bank implemented a second-straight interest-rate cut.
“The market has already factored in a fairly negative outcome from Europe and there’s some scope for sentiment to improve,” said Greg Gibbs, a foreign-exchange strategist in Sydney at Royal Bank of Scotland Group Plc.
New Zealand’s currency rose 0.5 percent to 75.67 U.S. cents at 11:29 a.m. in Sydney from 75.34 at the close in New York yesterday. It dropped as low as 74.62 yesterday, its weakest level since Nov. 28. It climbed 0.5 percent to 58.93 yen.
The Australian dollar advanced to 99.48 U.S. cents from 99.22 yesterday, when it tumbled as low as 98.62, also the least since Nov. 28. It rose 0.2 percent to 77.43 yen.
The MSCI Asia Pacific Index of shares advanced 0.4 percent. The Standard & Poor’s 500 Index of U.S. stocks gained yesterday for the first time this week.
The number of U.S. applications for unemployment payments dropped by 19,000 to 366,000 in the week ended Dec. 10, less than the lowest forecast of economists surveyed by Bloomberg News and the least since May 2008, according to Labor Department figures issued yesterday in Washington. Other reports showed manufacturing accelerated this month after pausing in November.
“The U.S. economy has certainly been pretty stable for several months,” said RBS’s Gibbs. Recent demand for U.S. dollar may have been “excessive,” he said.
The RBA is scheduled to release on Dec. 20 the minutes of its most recent policy meeting. The board cut the central bank’s overnight cash rate target to 4.25 percent from 4.5 percent at its Dec. 6 gathering, its second reduction in two months.
--Editors: Benjamin Purvis, Garfield Reynolds
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