“The Australian and New Zealand dollars climbed as U.S. reports next week may show slowing new home sales and weakening confidence, boosting speculation the Federal Reserve will add measures to support the economy.
The so-called Aussie strengthened versus most of its 16 major peers this week after Fed Chairman Ben S. Bernanke said he may consider a third round of asset purchases, or quantitative easing, after a two-day central bank meeting this week. Gains in both South Pacific currencies were tempered as Asian stocks extended a global equity rout and after Moody’s Investors Service lowered the ratings for 15 banks, including Credit Suisse Group AG and Morgan Stanley.
“There are some prospects the Fed will embark on QE3 somewhere in the later part of the year,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “There will still be interest to buy the Aussie and the kiwi on dips, but they’re still a sell on rallies.”
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