(Sept 6 Bloomberg) Australia's dollar rose with other higher-yielding currencies after the nation's central bank kept interest rates steady and gave no indication that cuts would become necessary in the future.
The Aussie's five-day gain, the longest since March, has added almost 2 percent to its value versus the greenback. South Africa's rand led gains among major currencies, pushing its advance this month close to 4 percent, as data showed the economy avoided its second recession in seven years. The country's relatively high main interest rate of 7 percent is meanwhile encouraging investors to shrug off concerns over the future of its finance minister and the management of key state companies.
In a world where an increasing number of government bonds yield less than zero, relatively high-yielding currencies such as the Aussie and rand have become particularly sought after. They're also being spurred by waning bets on an imminent, dollar-boosting increase to Federal Reserve rates, after last week's below-forecast payrolls data and a surprise slowdown in manufacturing. That leaves the door open to currency gains elsewhere as other central banks, such as the RBA, refrain from loosening policy.
"The RBA haven't changed course at all," said Jeremy Stretch, London based head of foreign-exchange strategy at Canadian Imperial Bank of Commerce. On the rand, the gains have come even as "the local news doesn't necessarily tend to be terrifically positive."
Click on the link below to see the full story from Bloomberg: (by Lukanyo Mnyanda)