By TraderVox.com
Tradervox.com (Dublin) – The New Zealand and Australian dollars advanced to their strongest levels in two weeks as speculation Euro zone finance ministers will reach an agreement increased the demand for commodity related currencies. The kiwi and Aussie were supported by the strong performance of Asian shares after US shares registered their biggest advance in five months as holiday shopping season started to grip the market. The Australian dollar advanced to 0.1 percent from a two-week high against the kiwi as the investors and market analysts speculated that the Reserve Bank of Australia will cut its borrowing costs when they meet next month.
According to Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia, the euro zone finance ministers will be positive for the kiwi and Aussie if they give positive news. He projected that the currencies are already reaping from the increased optimism and the news of an agreement will boost their demand for the short-term. The Australian benchmark yields declined by 0.03 percentage point, to 3.27 percent from its close on November 23 of 3.30 percent, this was the highest level since October 26. The New Zealand two-year swap rate fell by two basis points to 2.64 percent.
The south pacific currencies advanced as MSCI Asia Pacific Index of shares gained by 0.5 percent. The S&P 500 Index of US stocks rose by 3.6 percent last week, registering its biggest weekly advance since the week ending June 8. The Aussie was trading at $1.0458 at the close of trading in Sydney where it traded at 86.09 yen per Australian dollar. The New Zealand dollar exchanged at 82.39 US Cents and 67.83 yen.
The strong performance of south pacific currencies have come as Finance official meet in Brussels today after an all-night meeting and a European Union summit failed to reach an agreement on the necessary measures to be taken to secure Greece bailout.
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