The Australian and New Zealand currencies traded near the highest levels in more than two months against the dollar amid bets the Federal Reserve will add to monetary stimulus at its policy meeting starting today.
The so-called kiwi dollar touched the strongest in five weeks against its Australian counterpart after house prices in the smaller country rose last month at the fastest annual pace in five years and card spending increased. The South Pacific nations’ currencies were supported versus the dollar amid speculation the U.S. central bank will expand bond-buying that tends to debase the greenback. Demand for Aussie was limited after business confidence dropped to lowest level since 2009.
“We’re expecting the Fed to announce another asset- purchase scheme this week,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “That’s likely to maintain downward pressure on the U.S. dollar and allow the kiwi and the Aussie to keep rising.”
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