Australia’s dollar rose to its highest level in a week amid speculation its recent decline has been excessive.
The Aussie recovered from an earlier loss that had been fueled by concern that trade is slowing with China, its biggest export destination. The currency touched a three-year low on July 3 as traders’ bets on a drop reached a record. New Zealand’s kiwi dollar was supported after the finance minister said it’s certain the nation’s interest rates will rise.
“Everybody who’s got a bearish view on Aussie dollar has already put their money where their mouth is,” said Ray Attrill, the Sydney-based global co-head of currency strategy at NAB. “Positioning looks to be extreme.”