South Pacific Currencies Gain Against the Yen

By TraderVox.com

Tradervox (Dublin) – After the FOMC announced its decision on Tuesday, it dampened the prospects of another round of bond purchases causes the dollar to rise against the south pacific currencies. However, this has not been the case with the yen. BOJ Governor commented that the plan for more asset purchases was still on the table. This caused the yen to depreciate against the south pacific currencies. The Australian dollar was at 10-month high against the yen as commodity prices boosted prospects for the export industry.

The New Zealand dollar was at 7-month high against the yen as Asian stocks offered support for riskier assets. However, the two south pacific dollars were not strong enough to reverse their losses against the US dollar. After the FOMC decision the greenback rose against both currencies. Investors have interpreted the decision to mean that the Fed is reluctant to go ahead with the next round of quantitative easing.

Adam Carr a Senior Economist in Sydney indicated that the rebound in commodity prices may keep the Australian dollar stronger against the yen. On the Kiwi, Carr said that positive global economic data and increase in commodities prices may make kiwi stronger against the yen. He added that the New Zealand dollar may even increase on the sentiments alone.

In the Sydney trading session, the Australian dollar rose by 0.2 percent against the yen to settle at 87.71 yen. The increase comes after the comments by the BOJ governor on the possibility of another QE. The Aussie had increased to 88.01 yen on March 2 the highest it has been since May 11. The New Zealand dollar traded at 68.28 yen yesterday but edged a little to 68.26 yen today maintaining its 1.5 percent increase from yesterday. Both south pacific dollars reduced against the dollar with Aussie declining by 0.1 percent to trade at $1.0544 while the kiwi declined by 0.3 percent to trade at 82.06 US cents.

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