(Nov 1 Reuters) The Australian and New Zealand dollar both gained strongly on the back of a handful of upbeat Asian economic surveys on Tuesday as investors picked through the messages from the week's first major central bank meetings.
Another relatively upbeat statement from the Australian central bank quashed any expectations of a near-term cut in interest rates and reduced the prospects of one next year, fuelling an almost 1 percent rise for the Aussie.
"There were a few economists expecting a cut...so the fact they didn't provide a bit of relief for the currency," said Dominic Bunning, a currency strategist with HSBC in London.
"But also there was a general question mark over whether they might be a bit more dovish in the statement, because inflation obviously has been low. That they're willing to look through that low inflation, the fact that they are flexible on the inflation target, just provided a bit of a relief rally."
Solid gains for the kiwi dollar, however, pointed to a broader trend driven by rising global bond yields and another solid read on sentiment in the Chiinese manufacturing sector that is crucial to world and Asian growth.
Neil Mellor, a strategist with Bank of New York Mellon in London, argued that the rise in the Aussie was part of a broader trend to jump on the currency of any central bank that hints at a move away from the ultra-loose policy of the past decade.
"The Reserve Bank is looking at fairly weak consumer prices but asset and house prices that are going through the roof," Mellor said.
Click on the link below to see the full story from Reuters: (by Patrick Graham)