Stock market

Australia, N.Z. Dollars Rise as U.S. Stock Markets Gain


June 17 (Bloomberg) -- The Australian and New Zealand dollars advanced as U.S. stocks rose, prompting speculation investors will buy higher-yielding assets.

Australia’s dollar also advanced as an index of economic indicators increased in April for a second month. New Zealand’s dollar earlier weakened as the Reserve Bank’s Governor Alan Bollard said the currency’s recent gains were slowing the nation’s economic recovery.

“It’s a stock-driven market,” said Sue Trinh, a senior currency strategist at RBC Capital Markets in Sydney.

Australia’s dollar advanced 0.1 percent to 79.41 U.S. cents at 2:45 p.m. in New York, from 79.34 cents yesterday. New Zealand’s currency appreciated 0.7 percent to 63.46 U.S. cents from 63.01 cents.

A gauge of future economic growth in Australia increased 0.7 percent in April, Westpac Banking Corp. and the Melbourne Institute said in Sydney today.

The Standard & Poor’s 500 Index of U.S. shares advanced 0.3 percent today after dropping 1.3 percent yesterday.

Benchmark interest rates are 3 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets.

The New Zealand dollar fell earlier today after Bollard said investors buying the currency expecting a strong recovery may be disappointed.

“We expect the economy to begin growing again toward the end of the year, but the recovery is likely to be slow and drawn-out,” he said in a speech in Wellington. “It could also be erratic.”