Australia’s bonds fell, sending benchmark 10-year yields to a nine-month high, and the local dollar was supported amid speculation the central bank will hold interest rates unchanged tomorrow.
The so-called Aussie dollar gained against most of it major peers after a private report showed inflation advanced to the middle of the Reserve Bank of Australia’s goal, adding to the case to keep rates on hold. New Zealand’s dollar, nicknamed the kiwi, rose to the strongest since September 2011 versus the greenback as a rally in global stocks boosted demand for higher- yielding assets. The currency gained to a level unseen since July 2010 against its Australian counterpart.
“Stronger economic growth and leaving rates on hold would be positive for the Aussie,” said Hans Kunnen, chief economist at St. George Bank Ltd. in Sydney. “The Reserve Bank will continue to wait and see the impact of earlier cuts. There just doesn’t seem to be the same level of anxiety there was last year.”
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