2013.04.1705:11:11UTC+00Kiwi, Aussie Dollars hold advances as stocks, commodities boost

The New Zealand and Australian dollars held gains from yesterday as rallies in stocks and commodity prices increased demand for higher-yielding assets.

Australia’s government bonds subside, with the three-year yield rising from a 11-week low. New Zealand’s dollar jumped versus most major peers after Auckland-based Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter, said whole milk powder prices hike. The so-called kiwi briefly downgrades after the annual inflation rate held below the Reserve Bank of New Zealand’s target range for a third quarter.

“Commodity currencies in general have recovered since we haven’t had further significant selling of gold, and commodity prices have performed a little bit better,” said Ray Attrill, Sydney based global co-head of currency strategy at National Australia Bank Ltd. New Zealand’s consumer price data was “pretty much bang in line with expectations. There was an initial attempt to try and sell the New Zealand dollar but it didn’t get very far.”

The Aussie exchanged at $1.0381 as of 10:15 a.m. in Sydney from $1.0390 yesterday, when it bolster 0.8 percent. The currency moved forward to 101.47 yen from 101.34. The New Zealand dollar inch up at 84.90 U.S. cents after earlier falling as much as 0.3 percent. It strengthened 1 percent yesterday. The so- called kiwi upgrades 0.2 percent to 82.98 yen.

Australia’s government bonds dive, pushing three-year yields up three basis points, or 0.03 percentage point to 2.77 percent from yesterday, when they reached 2.68 percent, a level unseen since Jan. 24. Ten-year yields increased one basis point to 3.27 percent.

The MSCI World Index moved up with 0.5 percent yesterday, while Thomson Reuters/Jefferies CRB index of raw materials surged 0.8 percent, its first advance in five days.

Milk Prices

Whole milk powder for June delivery soared 4.4 percent to a record $6,283 a metric ton, according to Fonterra’s GlobalDairyTrade website.

In New Zealand, consumer prices increased 0.9 percent from a year earlier, Statistics New Zealand said in Wellington today, matching the median calculation in a Bloomberg News survey and the prediction from the Reserve Bank of New Zealand.

The central bank aims annual price increase of 1 percent to 3 percent. RBNZ Governor Graeme Wheeler last month stated he expected to leave borrowing costs unaltered at 2.5 percent this year because of the effects of a drought and the strong currency on progress.

New Zealand’s two-year swap rate, a fixed payment made to receive a floating rate, was little changed at 2.87 percent. The Reserve Bank of New Zealand will meet on April 24.