Australia’s dollar rose versus most of its 16 major counterparts on prospects Reserve Bank officials meeting next week will refrain from cutting borrowing costs.
The so-called Aussie climbed for a third day against the yen and reversed an earlier decline versus the dollar, following reports that signaled a slowdown in Chinese manufacturing expansion. New Zealand’s currency, known as the kiwi, strengthened versus the dollar and yen as a pullback in Asian stock losses outweighed data today that showed an unexpected drop in the country’s terms of trade.
“The RBA is in wait-and-see mode,” said Andrew Salter, a currency strategist at Australia & New Zealand Banking Group Ltd. (ANZ) In Sydney. “We’re coming to the bottom of the range in the Aussie. We see value at current levels.” ANZ predicts the Australian currency will trade at $1.05 by Dec. 31.
The Aussie added 0.2 percent to $1.0235 as of 4:48 p.m. in Sydney, set for a weekly drop of 0.8 percent. It gained 0.2 percent to 94.76 yen.
New Zealand’s currency rose 0.3 percent to 82.74 U.S. cents. It’s poised to fall 1.3 percent this week, the biggest decline since Dec. 21. It climbed 0.3 percent to 76.60 yen.
The MSCI Asia Pacific Index of shares was little changed after earlier falling as much as 0.4 percent.
Interest-rate swaps data compiled by Bloomberg show traders see an 82 percent chance RBA Governor Glenn Stevens will keep his nation’s key interest rate at 3 percent on March 5.
China’s manufacturing Purchasing Managers’ Index dropped to 50.1 last month from 50.4 in January, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compares with a 50.5 median estimate in a Bloomberg News survey of economists before the report. China is Australia’s largest trading partner.
A similar gauge of Chinese factory output by HSBC Holdings Plc and Markit Economics fell to 50.4 in February from 52.3 in the previous month. Analysts in a separate poll predicted a decline to 50.6.
In New Zealand, a government report showed the terms of trade declined 1.3 percent in the three months through December from the previous quarter, when it fell 3.2 percent. Analysts polled by Bloomberg expected a 1.2 percent gain.
Australia’s 10-year government bond yield slid one basis point, or 0.01 percentage point, 3.34 percent. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates that are sensitive to expectations for borrowing costs, was at 2.96 percent from 2.97 percent yesterday.
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