The Australian and New Zealand dollars declined against most of their major peers as speculation that China will take more measures to cool growth dented demand for higher-yielding currencies. The U.S. currency and the yen strengthened as equity losses boosted demand for a refuge. Data showed China’s economic growth accelerated, adding to pressure for monetary tightening. The euro gained against the pound and the yen as statistics showed German producer prices climbed at the fastest pace in seven months. The dollar pared gains against the common currency before data that economists predict will show U.S. continuing jobless claims increased and home-sales growth slowed.
“Today’s move away from risks appears to be linked with fears of further Chinese policy tightening,” said Jane Foley, a senior currency strategist at Rabobank International in London. “The risk-off environment threatens to pressure the commodities currencies.” Australia’s currency fell 0.5 percent to 99.57 U.S. cents as of 9:45 a.m. in London, after strengthening 1.2 percent over the previous three days. It depreciated against 13 of its 16 major counterparts as the MSCI Asia Pacific Index of shares fell 1.5 percent, ending a two-day gain.
Europe’s Stoxx 600 index fell 0.3 percent today, following declines by Asian and U.S. equities. Chinese Growth The U.S. dollar rose 0.2 percent to 82.18 yen and was little changed against the euro at $1.3468. The euro was at 110.69 yen from 110.49 yen. The yen climbed 0.3 percent to 81.83 per Australian dollar.
China’s economic growth quickened to an annual rate of 9.8 percent in the fourth quarter, up from 9.6 percent in the prior three months, the statistics bureau said in Beijing. Consumer prices rose 4.6 percent in December from a year earlier, compared with 5.1 percent the previous month.
The People’s Bank of China will increase the key one-year lending rate to 6.81 percent from 5.81 percent this year and let the yuan strengthen about 6 percent against the dollar, Nomura Holdings Inc. forecast this week. New Zealand’s dollar retreated from near the strongest this year. The government said consumer prices rose 2.3 percent in the fourth quarter from the previous three months, when they advanced 1.1 percent. Economists surveyed by Bloomberg forecast 2.4 percent growth.
“It looks like a risk-off day and the U.S. dollar should rally across the board,” said Tim Kelleher, vice-president of institutional banking and markets in Auckland at Commonwealth Bank of Australia, the nation’s largest lender. “There’s no change in rate expectations in New Zealand, and the currency is drifting off.” New Zealand’s dollar slid to 76.41 U.S. cents from 76.88 cents yesterday, when it climbed 77.87 cents, the highest level since Dec. 31.
Source:Bloomberg By
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