New Zealand’s currency also climbed to the highest since it was freely floated in 1985 after a private survey showed business confidence improved in July. Both reports added to pressure for the nations’ central banks to tighten monetary policy, increasing demand for their assets among investors seeking a haven from the U.S.’s debt deadlock. The Reserve Bank of New Zealand will hold a policy meeting tomorrow.
“The money market will take out most, but probably not all, of the rate cuts that it’s got priced in for the next 12 months,” said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia, the nation’s biggest lender. “Not just the Reserve Bank of Australia, but U.S. dollar weakness across the board will boost the Aussie.”
Australia’s currency advanced to as high as $1.1063, the strongest since it was floated in 1983, before trading at $1.1051 as of 4:56 p.m. in Sydney from $1.0956 in New York. The so-called Aussie climbed 0.6 percent to 85.87 yen.
New Zealand’s dollar rose 0.5 percent to 87.51 U.S. cents after earlier reaching a record 87.65 cents. The currency gained 0.3 percent to 68.01 yen.
Australia’s consumer price index rose 0.9 percent from the previous three months, the Bureau of Statistics said today. That was more than the 0.7 percent median estimate in a Bloomberg News survey of 25 economists. Prices were 3.6 percent higher than a year earlier, compared with the median forecast of 3.4 percent.
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