The Australia dollar rose against its U.S. counterpart on demand for global risk assets even as stocks erased earlier gains.
Australia’s dollar advanced versus all but two of its 16 most-traded counterparts even after a business confidence index slipped to minus 1 last month from zero in September, according to a 400-company survey conducted by National Australia Bank Ltd. New Zealand’s dollar fell against the greenback after earlier rising as much as 0.4 percent.
“The decline in confidence is clearly having an impact on aggregate demand,” Boris Schlossberg, managing director of foreign exchange at BK Asset Management, an investment advisory firm in New York, wrote yesterday in a note to clients. ”All three sectors of the economy -- manufacturing, construction and broader services -- have all contracted this year.”
Australia’s currency appreciated 0.1 percent to $1.0435 yesterday in New York after earlier rising to $1.0446, its highest level since Nov. 7. It fell 0.1 percent to 82.83 yen.
The New Zealand dollar, nicknamed the kiwi, decreased 0.2 percent to 81.60 U.S. cents after reaching 82.04, also the strongest level since Nov. 7. The kiwi declined 0.3 percent to 64.78 yen.
The Australian dollar may weaken to its lowest level since Oct. 8 after it was unable to advance beyond the resistance area from $1.0475 to $1.0480 last week, Niall O’Connor, a New York- based technical analyst at JPMorgan Chase & Co., wrote yesterday in a client note. If the currency falls below key support levels of $1.0328 and $1.0355, it may depreciate to $1.0149, he said.
Resistance is an area on a chart where sell orders may be clustered, and support is an area where there may be buy orders.
New Zealand’s dollar has strengthened 4.8 percent this year, the biggest gain among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The Aussie has gained 1.2 percent, and the greenback is down 1.2 percent.
To contact the reporter on this story: Joseph Ciolli in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dave Liedtka at email@example.com