Aussie Maintains Gain Before Reserve Bank Sets Monetary Policy The Australian dollar maintained gains before a central bank meeting where policy makers are expected to leave interest rates unchanged at a record low and reiterate that a weaker currency will aid the economy. The Aussie pared an advance after a report showed retail sales grew less than predicted and the nation’s current account deficit was wider than estimated. The Reserve Bank of Australia is scheduled to announce its monetary policy decision at 2:30 p.m. Sydney time today. New Zealand’s dollar gained earlier as private data showed the nation’s commodity export prices rose. “The RBA will still try to talk the currency down but it may not be enough,” said Tim Kelleher, the head of institutional foreign-exchange sales in Auckland at ASB Bank. “Given that emerging markets have calmed down a bit in the last week and equity markets in China and Brazil have rallied, the risk is that the Aussie squeezes a bit higher.” The Aussie was unchanged at 89.78 U.S. cents at 12:21 p.m. in Sydney, after climbing 0.9 percent yesterday. It touched 90.25, the most since Aug. 27, and gained 0.2 percent to 89.35 yen after reaching 89.94, the most since Aug. 19. The kiwi was little changed 78.08 U.S. cents after jumping 1.1 percent yesterday. It rose 0.1 percent to 77.66 yen. The MSCI Asia Pacific Index of regional stocks rose 1.3 percent. Australia sells more than 70 percent of its merchandise exports to Asia. Australia’s dollar will face selling pressure at 90.50 cents today and may rally toward 93 cents this week, ASB’s Kelleher said. The kiwi has resistance near 78.50 and can advance to 80.50 this week, he said. Retail sales climbed 0.1 percent in July, compared with the median forecast for a 0.4 percent gain in a Bloomberg News survey of economists. A separate report showed the current account deficit widened to A$9.4 billion in the second quarter, more than the A$8.5 billion that economists had predicted. RBA Governor Glenn Stevens will keep Australia’s benchmark rate at a record-low 2.5 percent according to all 32 economists in a Bloomberg News survey. The RBA has lowered rates by 2.25 percentage points since November 2011. The New Zealand dollar gained versus 14 of its 16 most traded peers as ANZ Bank New Zealand Ltd. said commodity export prices rose 0.7 percent in August after a 0.6 percent gain the previous month. The nation’s two-year swap rate, a fixed payment made to receive floating rates, rose three basis points to 3.48 percent. Australia’s 10-year bond yields rose one basis point to 3.97 percent and three-year rates climbed to 2.77 percent from 2.75 percent yesterday.
Posted on: Tue, 03 Sep 2013 03:02:15 +0000
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