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Aussie Dollar Near Highest Since July on Syria Plan, Stocks Gain - (Bloomberg)

Posted by Chris Advincula on Sep 11, 2013 7:16:00 AM

Australia’s dollar traded 0.2 percent from its highest level since July as optimism that Syria may avoid U.S. air strikes and gains in global stocks boosted risk appetite.

U.S. President Barack Obama said a Russian proposal for Syria to turn over its chemical weapons to international supervision was a “potentially positive development,” saying that if such plan were to come true, the U.S. would hold off on attacking Syria. Australian bonds fell, sending the benchmark 10-year yield to the highest since March 2012.

“If the possibility of strikes against Syria continues to ease, that’s going to be positive for risk appetite and positive for the Australian dollar and kiwi dollar,” said Janu Chan, an economist at St. George Bank Ltd. in Sydney. “But beyond this week, it would be limited on how much the Aussie could rise from here.”

Australia’s dollar slid 0.1 percent to 92.99 U.S. cents at 10:05 a.m. in Sydney from yesterday, when it reached 93.19, a level unseen since July 24. The currency was little changed at 93.26 yen from 93.48 yesterday, when it jumped 1.7 percent. It fetched NZ$1.1544.

New Zealand’s dollar fell 0.2 percent to 80.56 U.S. cents from yesterday, when it touched 80.76, the strongest since Aug. 19. The kiwi dollar declined 0.2 percent to 80.87 yen.

The yield on Australia’s benchmark 10-year bond gained four basis points, or 0.04 percentage point, to 4.17 percent, after reaching 4.18 percent, the most since March 2012.

The MSCI World Index of shares rose 0.9 percent yesterday.

Consumer Sentiment

Westpac Banking Corp. (WBC) and Melbourne Institute will release their gauge of Australian consumer confidence for September at 10:30 a.m. in Sydney today. The gauge rose 3.5 percent last month to 105.7, the highest since March.

National Australia Bank Ltd.’s index of business confidence jumped to a reading of 6 in August from minus 3 the previous month, the highest since May 2011, the bank said yesterday, based on a survey of more than 600 companies taken Aug. 20 to Sept. 3.

“Yesterday’s business confidence data was encouraging,” said St. George’s Chan. “If consumer confidence surprises on the upside today, there’s a possibility that the Aussie could track higher, but in the medium term we see more downside risk for the currency.”

The Reserve Bank of New Zealand meets tomorrow, and all 15 economists surveyed by Bloomberg News expect policy makers to keep rates unchanged at 2.5 percent. The nation’s two-year swap rate, a fixed payment made to receive a floating rate, was unchanged at 3.51 percent. 


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Source: Bloomberg


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