N.Z. Currency Near 2-Week High Versus U.S., Australian Dollars

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New Zealand’s dollar rose to a two- week high against the U.S. and Australian currencies after central bank Governor Alan Bollard signaled he may slow the pace of interest-rate cuts and Australian unemployment increased.

Australia’s dollar pared gains against the greenback from the strongest in a week as the nation’s jobless rate climbed to 5.2 percent in February, the most since March 2005. Bollard said further rate reductions will be “much smaller than observed recently,” after cutting borrowing costs today by 0.5 percentage point to 3 percent.

Investors “should sell the Aussie versus the kiwi today as the numbers in Australia are deteriorating while New Zealand is a little more advanced in their cycle now,” said Greg Gibbs, director of foreign-exchange strategy in Sydney at ABN Amro Australia Ltd.

New Zealand’s dollar climbed to as high as 51.44 U.S. cents, the strongest since Feb. 26, and traded at 51.33 cents as of 6:24 p.m. in Wellington from 50.49 cents late in Asia yesterday. It bought 49.38 yen from 49.71 yesterday. The kiwi, as the currency is also called, advanced as much as 1.3 percent against the Australian dollar to NZ$1.2638, the highest since March 2.

Australia’s currency advanced 0.1 percent to 64.82 U.S. cents from 64.78 cents late in Asia yesterday. It earlier rose as high as 65.25 cents, the most since March 5. The currency fell 2.1 percent to 62.39 yen.

From Bloomberg News.