“Australia’s dollar held a two-day gain versus the U.S. currency on bets the Federal Reserve will affirm its commitment to so-called quantitative easing at the end of a policy meeting today.
New Zealand’s kiwi dollar maintained its biggest monthly advance against the greenback since September ahead of U.S. data forecast to show manufacturing activity cooled and private employers added the fewest jobs since October. Factory production expanded in China, the biggest trading partner of both South Pacific nations.
“Not everything is all bright and rosy” in the U.S., Janu Chan, a Sydney-based economist at St. George Bank Ltd., said on a conference call with clients. “QE from the Fed and elsewhere can only mean further upside for the Australian dollar.”
The so-called Aussie slid 0.2 percent to $1.0353 as of 5:01 p.m. in Sydney, following a 0.9 percent gain over the previous two days. The New Zealand dollar added 0.1 percent to 85.72 U.S. cents, after rising 2.3 percent in April.
Two-year Australian bond yields touched 2.56 percent, the lowest since Nov. 1. Ten-year rates were little changed at 3.1 percent.
Prospects the Fed will taper its $85 billion of monthly bond purchases have diminished amid a slowing economic recovery. Minutes from the March meeting show several Fed officials discussed slowing the pace of stimulus.
Private employment rose by 150,000 in April after gaining 158,000 the previous month, data from the Roseland, New Jersey- based ADP Research Institute will probably show today, according to the median estimate of economists surveyed by Bloomberg News.
U.S. Manufacturing
The Institute for Supply Management manufacturing index, sank to 50.6 in April from March’s 51.3, a second consecutive decrease, according to a separate Bloomberg poll ahead of today’s release. Readings above 50 signal expansion….”
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