The Australian dollar traded within one U.S. cent of a two-year high on speculation the Reserve Bank will boost borrowing costs today.
The so-called Aussie has climbed 5.9 percent versus the U.S. dollar since Sept. 1 as economists forecast the central bank will raise the overnight cash rate target to 4.75 percent from 4.5 percent. Reports today showed Australia’s trade balance and retail sales grew. New Zealand’s dollar fell as the nation’s business confidence dropped.
The RBA “is not saying anything to change its view that growth is going to be above trend, and that’s going to threaten inflation,” said Ray Attrill, global research director at Forecast Ltd. in Sydney. “The Aussie is going to have a knee- jerk positive reaction from” a rate increase.
Australia’s currency was at 96.69 U.S. cents as of 11:40 a.m. in Sydney from 96.83 cents in New York yesterday. It touched 97.51 cents on Oct. 1, the highest level since July 2008. The currency was at 80.78 yen from 80.71 yen.
New Zealand’s dollar, nicknamed the kiwi, fell to 73.91 U.S. cents, from 74.18 cents. It reached 74.63 cents on Oct. 1, the strongest level since Nov. 19. The currency was at 61.75 yen from 61.83 yen.
RBA Outlook
RBA Governor Glenn Stevens signaled last month the biggest mining boom in more than a century may prompt him to extend the most aggressive round of rate increases by a Group of 20 member nation to curb inflation pressures. Policy makers have left the rate unchanged since May, citing European debt concerns.
There is a 73 percent probability the central bank will raise borrowing costs today, according to swap indexes by Credit Suisse Group AG.
Australia’s trade surplus widened to A$2.35 billion ($2.3 billion) in August from a revised A$1.74 billion in July, the government reported today. The nation’s retail sales rose 0.3 percent in August, the government also reported.
New Zealand’s dollar declined, heading for its first drop since Sept. 30, after a private report showed businesses became less confident, adding to speculation the Reserve Bank of New Zealand Governor Alan Bollard will keep interest rates on hold on Oct. 28.
A net 6 percent of New Zealand’s companies surveyed expect the economy will improve over the next six months, down from 18 percent in the second quarter, the New Zealand Institute of Economic Research said today in Wellington.
“This soft report is all the more reason for RBNZ Bollard to talk down the New Zealand dollar against the Australian dollar,” Annette Beacher, senior strategist at TD Securities in Singapore, wrote in a research note today.
The New Zealand dollar fell 0.2 percent to NZ$1.3082 against Australia’s dollar. It reached NZ$1.3180 per Australian dollar on Sept. 30, the weakest since April 7.
The yield on Australia’s 10-year note rose seven basis points, or 0.07 percentage point, to 5.07 percent, according to data compiled by Bloomberg. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, was unchanged at 3.73 percent.
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.
http://jodnet.blogspot.com
The so-called Aussie has climbed 5.9 percent versus the U.S. dollar since Sept. 1 as economists forecast the central bank will raise the overnight cash rate target to 4.75 percent from 4.5 percent. Reports today showed Australia’s trade balance and retail sales grew. New Zealand’s dollar fell as the nation’s business confidence dropped.
The RBA “is not saying anything to change its view that growth is going to be above trend, and that’s going to threaten inflation,” said Ray Attrill, global research director at Forecast Ltd. in Sydney. “The Aussie is going to have a knee- jerk positive reaction from” a rate increase.
Australia’s currency was at 96.69 U.S. cents as of 11:40 a.m. in Sydney from 96.83 cents in New York yesterday. It touched 97.51 cents on Oct. 1, the highest level since July 2008. The currency was at 80.78 yen from 80.71 yen.
New Zealand’s dollar, nicknamed the kiwi, fell to 73.91 U.S. cents, from 74.18 cents. It reached 74.63 cents on Oct. 1, the strongest level since Nov. 19. The currency was at 61.75 yen from 61.83 yen.
RBA Outlook
RBA Governor Glenn Stevens signaled last month the biggest mining boom in more than a century may prompt him to extend the most aggressive round of rate increases by a Group of 20 member nation to curb inflation pressures. Policy makers have left the rate unchanged since May, citing European debt concerns.
There is a 73 percent probability the central bank will raise borrowing costs today, according to swap indexes by Credit Suisse Group AG.
Australia’s trade surplus widened to A$2.35 billion ($2.3 billion) in August from a revised A$1.74 billion in July, the government reported today. The nation’s retail sales rose 0.3 percent in August, the government also reported.
New Zealand’s dollar declined, heading for its first drop since Sept. 30, after a private report showed businesses became less confident, adding to speculation the Reserve Bank of New Zealand Governor Alan Bollard will keep interest rates on hold on Oct. 28.
A net 6 percent of New Zealand’s companies surveyed expect the economy will improve over the next six months, down from 18 percent in the second quarter, the New Zealand Institute of Economic Research said today in Wellington.
“This soft report is all the more reason for RBNZ Bollard to talk down the New Zealand dollar against the Australian dollar,” Annette Beacher, senior strategist at TD Securities in Singapore, wrote in a research note today.
The New Zealand dollar fell 0.2 percent to NZ$1.3082 against Australia’s dollar. It reached NZ$1.3180 per Australian dollar on Sept. 30, the weakest since April 7.
The yield on Australia’s 10-year note rose seven basis points, or 0.07 percentage point, to 5.07 percent, according to data compiled by Bloomberg. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, was unchanged at 3.73 percent.
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.
http://jodnet.blogspot.com
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