“New Zealand’s dollar touched a 2 1/2-year high against Australia’s as the smaller nation’s retail sales grew faster than economists predicted, boosting bets its central bank will raise interest rates.
The so-called kiwi climbed to its strongest in 17 months against the greenback as non-resident holdings of the nation’s sovereign debt rose to the most since October 2009. The Australian and New Zealand dollars are both poised to gain against the U.S. currency this week as speculation global growth will quicken boosts demand for higher-yielding assets.
“The New Zealand economy is in recovery and outperforming its peers, and the kiwi dollar is likely to push higher,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “The Reserve Bank has a mild tightening bias, and in a world of easy policy and quantitative easing, a tightening bias is all you need to stand out from the pack.”
New Zealand’s currency traded at NZ$1.2180 per Aussie dollar at 4:52 p.m. in Sydney, after climbing to NZ$1.2143, the highest since July 2010. It added 0.1 percent to 85.12 U.S. cents after touching 85.34, the most since September 2011. The kiwi advanced 1.9 percent against the greenback this week. It lost 0.3 percent to 78.81 yen today.
Australia’s dollar rose 0.1 percent to $1.0366, poised for a 0.5 percent weekly advance. It slid 0.2 percent to 95.98 yen and has gained 0.4 percent this week.
The New Zealand dollar’s trade-weighted index rose as much as 0.5 percent to 77.50, the highest since it was freely floated in 1985.
