NEW YORK ( TheStreet) -- The global, coordinated selloff of the Japanese yen bolstered commodity currencies in U.S. trading Tuesday.
One of the primary beneficiaries of the yen suppression Tuesday was the Australian dollar -- via the carry trade. The Australian dollar was 1.2% stronger at 84.615 yen and 0.2% firmer at $1.02666. CurrencyShares Australian Dollar Trust (FXA) was up 0.1% to $103.
"The carry trade is back, and pushing the Australian dollar back into record territory. With the G7 intervening to keep the Japanese yen down, the carry trade is pretty much a 'no brainer'," EverBank World Markets Vice President Chris Gaffney said. In carry trades, investors fund the buying of higher yielding currencies such as the Australian dollar after borrowing and selling lower yielding currencies such as the yen.
The carry trade has helped the Australian dollar hit a fresh high against the U.S. dollar recently and the New Zealand dollar shrug off losses. Other drivers have included expectations of more retail sales growth in Australia and New Zealand's first reported trade surplus in eight months in February as commodities achieved record high prices.The New Zealand dollar was rising 1.6% at 62.29 yen and 0.7% at $0.75597. WisdomTree Dreyfus NZ Dollar Fund (BNZ) was adding 0.5% to $23.08.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV