Feb. 22 (Bloomberg) -- The Australian and New Zealand dollars strengthened against the yen amid better than expected U.S. housing data and higher commodity prices, spurring demand for higher-yielding assets.
The Australian currency maintained gains after Foreign Minister Kevin Rudd resigned, potentially paving the way for a leadership battle with Prime Minister Julia Gillard. Demand for the South Pacific currencies was tempered after a report signaled China’s manufacturing may shrink.
“Japanese investors are buying Aussie against the yen,” said Lee Wai Tuck, a strategist at Forecast Pte in Singapore. “There’s some hope that things in the U.S. may be turning slightly better. There’s a bit of optimism over there for now and that’s helped to encourage some risk-taking.”
Australia’s currency gained 0.5 percent to 85.46 yen at 2:30 p.m. New York time. It was little 0.2 percent lower at $1.0652. New Zealand’s dollar rose 0.2 percent to 66.63 yen. It was 0.5 percent weaker at 82.95 U.S. cents.
The Standard & Poor’s GSCI Index of 24 raw materials advanced 0.5 percent, gaining for a fifth straight day.
Sales of previously owned homes in the U.S. rose for a fourth month in January, climbing 4.3 percent to a 4.57 million annual rate, the highest level since May 2010, according to the National Association of Realtors.
The Australian currency held its advance after Rudd, the former Prime Minister who was ousted by Gillard as leader in 2010, announced during a trip to Washington that he was quitting as foreign minister. His resignation follows speculation about a challenge for the leadership of the governing Labor Party and opens the door for Rudd to contest for the top post again.
The Aussie was also supported after figures from the statistics bureau today indicated wages in the country rose 1 percent in the fourth quarter from the previous three-month period when they gained 0.7 percent. A separate report by Westpac Banking Corp. and the Melbourne Institute showed that the nation’s leading economic indicators climbed in December.
A preliminary reading of a purchasing managers’ index by HSBC Holdings Plc and Markit Economics showed the gauge was at 49.7 this month, after a final figure of 48.8 in January. A reading below 50 points to a contraction. January and February economic data are distorted by a weeklong Chinese holiday.
China is Australia’s biggest trading partner and New Zealand’s second-largest export destination.
--With assistance from Mariko Ishikawa in Tokyo and Allison Bennett in New York. Editor: Kenneth Pringle
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