The Australian dollar rose on bets the country will keep interest rates steady amid speculation the economy will be strong enough to weather Europe’s debt crisis.
The Aussie gained against most major peers before Reserve Bank of Australia policy makers are forecast to keep the key rate unchanged when they meet next week, according to a Bloomberg survey of economists. The New Zealand currency, nicknamed the kiwi, also climbed amid low expectations for results from European leaders’ two-day summit that opens tomorrow.
The Aussie advanced 0.5 percent to $1.0064 yesterday in New York after the previous day touching 99.69 U.S. cents, its weakest level since June 14. It rose 0.4 percent to 80.08 yen.
The kiwi climbed 0.5 percent to 79.11 U.S. cents and gained 0.3 percent to 62.90 yen.
Interest-rate swaps data compiled by Bloomberg show traders see a better than 53 percent chance RBA policy makers won’t change the benchmark rate when they meet July 3, up from a 30 percent probability seen on June 19.
The Aussie and kiwi extended gains after German Chancellor Angela Merkel told German lawmakers she doesn’t expect any shared debt liability in her lifetime even as Spain and Cyprus on June 25 became the fourth and fifth of the currency union’s 17 member states to require external aid.
To contact the reporter on this story: Lindsey Rupp in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dave Liedtka at email@example.com