Australia’s dollar rallied from near its weakest level in three months and New Zealand’s currency rose for a second day after an official report showed China’s manufacturing expansion was stronger than estimated.
New Zealand’s dollar climbed versus Australia’s after data showed export prices relative to import prices in the smaller economy rose to the highest level in 40 years. The Aussie strengthened after data showing building approvals fell less than estimated, while company profits climbed more than anticipated. Demand for the currency may be resilient before a Reserve Bank meeting tomorrow, when analysts predict policy makers will keep interest rates unchanged at 2.5 percent.
“The Aussie has started the week on a firmer footing, which is all to do with the China data,” said Ray Attrill, the global co-head of currency strategy at National Australia Bank Ltd. in Sydney. “The conditions for something of a reversal are perhaps falling into place. The market is looking for an excuse to buy back the Aussie and tomorrow’s RBA statement may provide that excuse.”
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