Australia’s dollar climbed above parity with the U.S. currency as the Reserve Bank said the global economy looks strong and there are signs of rising private investment in the nation amid higher commodity prices. Governor Glenn Stevens signaled further wage gains were also likely over the coming year while inflation was expected to remain within the central bank’s 2 percent to 3 percent target range. Demand for the Aussie was boosted as the state of New South Wales sold A$1.55 billion ($1.55 billion) of bonds. New Zealand’s dollar advanced against the greenback after a report showed the nation’s wages increased in the fourth quarter. “The statement was cautiously hawkish and removes any chance whatsoever of a rate cut,” said Kurt Magnus, executive director of currency sales at Nomura Holdings Inc. in Sydney. “You can’t sell Aussie on that RBA statement.” Australia’s dollar traded at $1.0026 as of 4:33 p.m. in Sydney from $1.0002 before the decision and 99.74 cents in New York yesterday. The so-called Aussie rose as high as $1.0039, the strongest since Jan. 19. The currency gained to 82.08 yen from 81.83 yen yesterday. New Zealand’s dollar rose to 77.43 U.S. cents from 77.29, and traded at 63.33 yen from 63.41 yen. The MSCI Asia Pacific Index of regional shares gained 0.3 percent and the Reuters/Jefferies CRB Index of raw materials yesterday reached the highest since October 2008. The Australian dollar will next target $1.0330, Magnus said as growth in Asia and the U.S. spur demand for commodities. Private Investment “There have been further indications that private investment is beginning to pick up in response to high levels of commodity prices,” Stevens said in the statement accompanying the decision. Policy makers will look through the impact on prices and economic growth from floods that devastated parts of the country, the central bank also said. Benchmark interest rates are 4.75 percent in Australia and 3 percent in New Zealand, compared as low as zero percent in the U.S. and Japan, attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits. “The RBA is not in any immediate hurry to change rates in either direction,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “The Aussie is going to struggle to make too much headway from here.” The Australian dollar extended yesterday’s gains against New Zealand’s currency after the larger nation’s statistics bureau said house prices unexpectedly rose in the fourth quarter. Prices advanced 0.7 percent in the three months through December, compared with the median forecast for a 0.2 percent decline. Prices increased 5.8 percent from a year earlier. Business Conditions, Wages A business conditions gauge, a measure of hiring, sales and profits, rose to 6 from 4 a month earlier, according to a National Australia Bank Ltd. survey of more than 400 companies from Jan. 10-14, and released today. New South Wales Treasury Corp., the funding arm of Australia’s most-populous state, raised A$1.55 billion in a sale of 6 percent benchmark bonds maturing in February 2018. Statistics New Zealand said today wages for the nation’s non-governmental workers rose 0.6 percent. The median forecast in a Bloomberg survey was for a 0.5 percent increase. Australia’s three-year bond futures contract for March delivery fell to 94.93 on the Sydney Futures Exchange from 94.95 yesterday. The implied yield on futures rose two basis points to 5.07 percent. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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