Commodity Dollars Supported as Equity Gains Bolster Confidence

Commodity currencies were supported as a rebound in global equities outweighed signs of a slowdown in China, the largest...

Commodity currencies were supported as a rebound in global equities outweighed signs of a slowdown in China, the largest export market for Australia and New Zealand.

The Aussie, kiwi recovered losses Monday and Canada’s loonie pared declines as an index of Asian stocks advanced for a third day on the back of stronger shares in the U.S. and Europe on Friday. The commodity currencies initially started weaker after the world’s second-largest economy reported lower-than-forecast retail sales and industrial production on Saturday.

Australia’s dollar rose 0.1 percent to 75.74 U.S. cents as of 10:23 a.m. in Tokyo, while New Zealand’s currency was little changed at 67.45 U.S. cents. Canada’s dollar fell 0.1 percent to C$1.3221 per greenback after weakening as much as 0.3 percent.

The MSCI Asia Pacific Index of shares jumped 1 percent even after data showed China’s industrial output rose 5.4 percent from a year earlier in January and February and retail sales climbed 10.2 percent from a year earlier, readings that were both less than forecast by economists surveyed by Bloomberg.

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The kiwi slumped on Thursday and Friday of last week after the Reserve Bank of New Zealand unexpectedly cut interest rates.

To contact the reporter on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net. To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net, Naoto Hosoda, Nicholas Reynolds

By: Chikako Mogi

©2016 Bloomberg News

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