By TraderVox.com
Tradervox (Dublin) – South pacific dollars gained against most major currencies today as the International Monetary Fund gave a positive global economic growth outlook today. The report led to an increase in demand of higher yielding assets causing the strengthening of the Australian and New Zealand dollars. The Kiwi increased against the US dollar and the Japanese yen as implied volatility of Group of Seven currencies touched the weakest level in more than three years.
The two south pacific dollars strengthened after reports of an increase in German investor confidence hit the Asian session this morning. The surpassing of the set target at a Spanish bill sale was also an indication that traders are expecting the ECB to alleviate the situation in Spain even after the Spain ten year yields soared to 6.0 percent.
New Zealand and Australian have high interest rate benchmarks of 2.5 percent and 4.25 percent respectively; as a result the declining implied volatility of three month options for Group of Seven currencies to 9.66 percent from a decade’s average of 10.6 percent led to an increase in demand of two currencies.
According to the IMF’s World Economic Outlook, the global economy will grow by 3.5 percent and 4.1 percent in 2012 and 2013 respectively. This is a revised outlook from its January forecast of 3.3 percent and 3 percent in 2012 and 2013 respectively. Another report by ZEW showed that analysts expectation increased to 23.4 in April from 22.3 reported in March making it the highest level since June 2010. Further, the demand for Spain’s 12-month bills exceeded expectations yesterday. These events have led to the increase of the south pacific currencies in the New York session yesterday which has been dragged in to the Asian session today.
The Aussie was up by 0.3 percent against the greenback exchanging at $1.0390 and exchanged at 84.00 against the yen which is 0.9 percent increase. On the other hand the kiwi grew stronger by 0.1 percent against the US dollar to exchange at 82.10 cents and regained its previous loses against the yen gaining 0.6 percent to trade at 66.38 yen.
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