Australia, New Zealand Dollars Gain on Greek Deal, China Reserve-Ratio Cut
The Australian and New Zealand dollars advanced versus most major counterparts on the prospect euro-area governments will agree today on a deal to release a second bailout package for Greece, spurring appetite for higher- yielding assets.
Both currencies also strengthened after China’s central bank said the proportion of cash that lenders must set aside will fall from Feb. 24, adding to speculation the action will boost the country’s economy and demand for exports from Australia and New Zealand. The so-called Aussie and kiwi both climbed to their highest levels against the yen in more than six months as Asian stocks rose.
“The Greek deal should be rubber-stamped by tonight,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “For the next week, the Aussie and the kiwi will remain on their uptrends.”
Australia’s currency rose 0.6 percent to $1.0770 as of 4:56 p.m. in Sydney. It gained 0.6 percent to 85.64 yen and earlier touched 86.36, the strongest level since July 11. New Zealand’s dollar advanced 1 percent to 84.06 U.S. cents. The kiwi strengthened 1 percent to 66.85 yen after earlier reaching 67.32, the highest since Aug. 4.
The Aussie slid 0.4 percent to NZ$1.2811, the biggest one- day drop since Jan. 31.
The MSCI Asia Pacific Index (MXAP) of stocks climbed 0.9 percent.
Finance ministers from the 17 euro-area nations will meet in Brussels today to decide on 130 billion euros ($172 billion) in Greek aid. Prime Minister Lucas Papademos said Greece found all the extra cuts needed to reduce spending by 325 million euros to receive a bailout and avert the region’s first sovereign default.