By GREG ANSLEY
MELBOURNE - Australia is warming to the concept of the Anzac dollar - a common currency with New Zealand.
Australian Reserve Bank Governor Ian Macfarlane, confounded by his own dollar's continued weakness, told the World Economic Forum Asian Summit that an approach by Wellington would not be dismissed out of hand.
"Our attitude is that it's essentially a decision for New Zealand," he said.
"The benefits or the costs are going to be borne almost exclusively by the smaller member of the partnership."
Mr Macfarlane's comments represent a further softening in the previous reluctance to consider a single transtasman currency, a proposition once dismissed out of hand by both sides.
It has become the subject of official studies in New Zealand, and has grown in appeal with the battering the dollar has taken on currency markets.
Last week, Prime Minister Helen Clark, an earlier opponent of a transtasman dollar and the transfer of sovereignty to Australia it would inevitably entail, raised the prospect of monetary union.
The proposal has also been advocated recently by Australian Senator Sandy Macdonald, chairman of the Senate foreign affairs, defence and trade legislation committee.
Both countries have been hammered by foreign exchange markets - with the New Zealand dollar suffering further on cross rates - despite relatively sound economic fundamentals.
Yesterday, the New Zealand dollar made a brief recovery, rising nearly threequarters of a cent to trade above 43USc. The rise had gathered momentum in overnight trading with rumours suggesting that Royal Dutch Shell was buying ahead of its much speculated purchase of Fletcher Challenge Energy at the end of the month. But late last night it retreated to 42.80USc, still showing a 50-point gain.
The action is expected to switch to the Australian dollar today when the latest economic growth figures are released. Economic forecasters last night were widely predicting that these will be stronger than forshadowed and could be a booster for the Australian dollar.
Meanwhile the International Monetary Fund said it was hard to see reasons for a weakening of the United States dollar which has driven most other currencies down in the past three months.
Garry Schinasi, the author of a report on capital markets issued by the IMF on the day that Europe's single currency tumbled to new lows, said investors still viewed the US as offering the world's best risk-adjusted rate of return, and that was keeping its dollar strong.
Weaker Aussie and kiwi stoke the fires of union
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