Bloomberg News

Aussie Holds Gains Before Trade Data; Kiwi Near 6-Week High

April 02, 2013

Australia’s dollar held a three-day gain against the U.S. currency before data forecast to show the nation’s trade deficit narrowed.

The so-called Aussie remained higher against the yen amid speculation the Bank of Japan (8301) will expand monetary easing at a two-day policy meeting that starts today. The Reserve Bank of Australia refrained from cutting rates yesterday and indicated existing stimulus is working. New Zealand’s dollar traded 0.3 percent from a six-week high after Fonterra Cooperative Group Ltd. (FCG), the world’s largest dairy exporter, said whole milk powder prices climbed to a record.

“Our interest rates are on hold and the rest of the world continues to print money,” Hans Kunnen, Sydney-based chief economist at St. George Bank Ltd., said on a conference call with clients today. “That makes a case for saying the Aussie can get to $1.06 in the months ahead.”

Australia’s currency traded at $1.0452 at 10:26 a.m. in Sydney from $1.0450 in New York, after having risen 0.4 percent in the past three sessions. The Aussie was little changed at 97.59 yen from 97.64 yesterday, when it gained 0.5 percent.

New Zealand’s kiwi dollar fetched 84.12 U.S. cents from 84.14 yesterday, when it touched 84.46, the highest since Feb. 20. It bought 78.55 yen from 78.63.

Yields on Australian 10-year bonds rose five basis points, or 0.05 percentage point, to 3.45 percent. The three-year rate added five basis points to 2.94 percent.

Trade Data

Australia’s imports probably outpaced exports by A$1 billion ($1.05 billion)in February, compared with a A$1.06 billion shortfall in January, according to the median estimate of economists surveyed by Bloomberg News before the Bureau of Statistics releases data today.

“There are a number of indications that the substantial easing of monetary policy during late 2011 and 2012 is having an expansionary effect on the economy,” RBA Governor Glenn Stevens said in a statement yesterday after leaving the overnight cash- rate target at 3 percent. Benchmark interest rates are as low as zero in the U.S. and Japan.

The BOJ will decide at this week’s meeting to boost monthly bond purchases by about 50 percent to 5.2 trillion yen ($55.7 billion), according to the average forecast in Bloomberg poll. The European Central Bank also sets policy tomorrow.

In New Zealand, milk powder for June delivery gained 12.8 percent to $5,998 a metric ton, according to a trade-weighted index on the Auckland-based Fonterra’s GlobalDairyTrade website.

To contact the reporters on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net; Kevin Buckland in Tokyo at kbuckland1@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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