The Australian dollar remained higher following a two-week advance amid speculation Federal Reserve officials meeting from tomorrow will maintain bond purchases that have supported higher-yielding assets globally.
Australia’s currency climbed versus most of its 16 major peers as economists surveyed by Bloomberg News predict the U.S. central bank will refrain from paring back its monthly buying of $85 billion of debt at this week’s meeting. The Aussie also strengthened after prices for iron ore, Australia’s biggest export, touched the highest in almost three months. The New Zealand dollar traded near a six-week high as traders boosted bets on an increase in borrowing costs.
“The downside in the Aussie is being protected by the inability of the U.S. dollar to continue to outperform,” said Andrew Salter, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Sydney. “Anything that puts the first move on tapering back further is going to be negative for the U.S. dollar.”
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