By TraderVox.com
Tradervox.com (Dublin) – The south pacific currencies increased the most this month against the US dollar after the European Central Bank President Mario Draghi indicated that policy makers will do everything possible to quell the preserve the euro, boosting demand for commodity related currencies. The two south pacific dollars increased as investors increased their bets central bank officials will act by intervening in the bond market to stop the high borrowing cost in countries such as Spain. Spanish two-, five-, ten-, and 30-year yields soured beyond 7 percent yesterday. The Aussie and Kiwi also rose as global stocks and commodities advanced.
Ravi Bharadwaj noted that the considerable gain experienced by the New Zealand dollar is as a result of the risk-on mood sparked by Draghi’s comments. Ravi is a market analyst at Western Union Business Solutions, which is a unit of Western Union Co in Washington. Apart from Draghi’s comments, the south pacific currencies also rose as Standard & Poor’s 500 Index increased by 1.9 percent and the MSCI Asia Pacific Index increased by 0.8 percent. Spanish 10-yar yields rose to a record 7.75 percent, increasing the pressure on ECB to intervene in the bond market.
As Draghi Spoke in the Global Investment Conference in London yesterday, he said that the increasing sovereign-bond yields may drop within the European Central Bank jurisdiction following its intended intervention. He promised that the bank’s interventions will work. The Australian dollar, nicknamed Aussie, surged 1.1 percent against the US dollar to trade at $1.0402 yesterday in New York and later closed lower at $1.0397 which is a 0.9 percent higher than the previous day’s close. The Aussie rose by 0.9 percent against the yen to exchange at 81.32 yen per Australian dollar. The New Zealand dollar was up by 1.8 percent against the US dollar after Draghi’s comment, to 80.30 US cents and closed the day lower at 80.19 cents, which is a 1.6 percent increment from previous day close. The kiwi climbed by 1.7 percent against the yen to trade at 62.72 yen.
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