“The Australian dollar climbed after Reserve Bank Governor Glenn Stevens endorsed the current level of borrowing costs and signaled that the bar is high for currency intervention.
The so-called Aussie advanced versus all of its 16 major counterparts after Stevens said “there is a good deal of interest rate stimulus in the pipeline” in testimony today to a parliamentary committee in Canberra. It’s set for a five-day gain after five consecutive weeks of declines, the longest stretch in eight months. New Zealand’s currency climbed after a report today showed credit card spending increased for a third- straight month in January.
“Stevens’ comments are very firmly focused on what a strong currency means for inflation, rather than including any threat of action,” said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp. (WBC) “The tone of his prepared comments indicates no great urgency to cut rates in the near term.”
The Australian dollar rose 0.7 percent to $1.0314 as of 4:49 p.m. in Sydney. It’s gained 0.1 percent since Feb. 15, when it completed a five-week decline, the longest streak since June. New Zealand’s dollar, known as the kiwi, climbed 0.4 percent to 83.76 U.S. cents, trimming its five-day drop to 0.9 percent.
The rate on Australia’s 3-year government bonds, among the most sensitive to interest-rate expectations, rose 3 basis points to 2.88 percent. The 10-year yield was little changed at 3.54 percent.
Interest-rate swaps data compiled by Bloomberg show traders see a 69 percent chance RBA policy makers will keep the cash rate at 3 percent when they next meet on March 5, up from 62 percent at the end of last week.
