RTTNews - Tuesday morning in Asia, the Australian and New Zealand dollars surged up to multi-day highs against their major counterparts as Asian stocks rose today after stocks on Wall Street climbed overnight on hopes for better U.S. financial sector performance.

Benchmark interest rates are 2.5 percent in New Zealand and 3 percent in Australia, compared with 0.1 percent in Japan and as low as zero in the U.S. attracting investors to the South Pacific nations' higher-yielding assets.

The Australian benchmark index S&P/ASX 200, which rose to 3,830 this morning, is currently trading at 3,842, up 104.30 points over its previous close. The broader All Ordinaries index is up by 76 points at 3,814.

New Zealand's benchmark index NZX 50 is presently trading at 2,742.21, up 5.32 points or 0.19% from its previous close.

The Aussie surged up to a 4-day high against the yen and a 5-day high against the greenback and the euro as Australia's business sentiment turned positive in June for the first time since December 2007, increasing central bank Governor Glenn Stevens' scope to keep borrowing costs unchanged at a half-century low this year.

The sentiment index rose 6 points to 4, after holding below zero for the previous 17 months, according to survey results published by the National Australia Bank Ltd. A figure above zero shows optimists outnumber pessimists.

NAB also said its measure of current Business Conditions also improved, but remained modestly in negative territory. The Business Conditions index rose 12.0 points in June to a reading of minus-2.

Rising business confidence adds to signs Australia's economy may skirt the global recession, helped by government spending and Stevens' decision to slash borrowing costs to 3 percent. The jobless rate rose less than forecast in June, consumer confidence jumped to the highest level since December 2007 and home-loan approvals rose for an eighth month.

Governor Stevens left the overnight cash rate target unchanged on July 7 for a third straight month after slashing the rate by 4.25 percentage points between September and April to spur consumer demand.

Australia's Gross domestic product unexpectedly expanded 0.4 percent in the first quarter from the previous three months as consumer spending and exports helped Australia avoid a recession, a report showed last month.

The Aussie that closed yesterday's trading at 1.7856 against the euro strengthened to a 5-day high of 1.7803 during early Asian deals on Tuesday. The next upside target level for the Australian currency is seen at 1.767.

The Aussie has gained 2% against the euro after it touched a 2-month low of 1.8109 yesterday.

In early Asian deals on Tuesday, the Australian dollar climbed to a 5-day high of 0.7858 against the U.S. currency and a 4-day high of 73.12 against the Japanese yen. If the aussie advances further, it may likely target 0.804 against the greenback and 76.7 against the yen.

Following weak Asian and European stock markets yesterday, the Aussie tumbled to new multi-week lows against the greenback and the yen in European trading. However, amid positive analysts comments on the financial sector, U.S. stocks surged up, which in turn helped Aussie to bounce back.

The aussie-greenback and the aussie-yen pairs were worth 0.7832 and 72.81, respectively at yesterday's New York session close.

Against the currency of Canada, the Aussie soared in early Asian deals on Tuesday. At present, the aussie-loonie pair is worth 0.9048, up from yesterday's close of 0.9015. The near term resistance for the pair is seen around the 0.93 level.

The Aussie edged up against the NZ dollar after hitting a 4-day low of 1.2360 at 8:50 pm ET Monday. Currently, the aussie-kiwi pair is trading near yesterday's New York session close of 1.2392 with 1.248 seen as the next target level.

During early Asian deals on Tuesday, the New Zealand dollar advanced to a 1-week high of 0.6350 against the U.S. currency. This may be compared to Monday's closing value of 0.6327. On the upside, 0.64 is seen as the next target level for the NZ dollar.

The New Zealand dollar has gained 10 percent against the U.S. dollar in the past six months, curbing exports which make up 30 percent of the economy.

Against the euro and the yen, the NZ dollar jumped to a 5-day high of 2.2036 and 59.15 in early Asian trading on Tuesday. If the kiwi moves up further, it may likely target 2.192 against the euro and 61.0 against the yen. The euro-kiwi pair closed yesterday's trading at 2.2104 and the kiwi-yen pair at 58.82 on Monday.

The German and the Euro-zone ZEW economic sentiment report for July is expected in the European session today.

The Canadian new motor vehicle sales for May, U.S. PPI, advance retail sales and the business inventories report-all for the month of June have been scheduled for release in the North American session.

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