NZ dollar holds near 5-month high before US payrolls

Feb. 3 (BusinessDesk) – The New Zealand dollar held near a 5-month high before the release in the US on Friday of non-farm payrolls, a weighty enough measure to lift global risk sentiment if it adds to signs the global economy hasn’t quite fallen in a hole.

The kiwi dollar traded at 83.09 US cents at 5pm in Wellington, from 83.46 cents late yesterday. It touched 83.69 cents, the highest since Sept. 2, in US trading yesterday. The trade-weighted index was little changed at 72.93, also near the highest since early September.

The US payrolls data may show the world’s biggest economy stacked on 140,000 jobs last month, according to a Bloomberg survey. That would add to December’s 200,000 and will be taken as a positive sign of growth in financial markets. It follows this week’s manufacturing PMI surveys out of China, Germany and the US that encouraged investors to a more upbeat view of global prospects.

“Data out of the US has not been as bad as people feared,” said Philip Borkin, economist at Goldman Sachs New Zealand. While there’s been speculation a reviving US economy could prod the Federal Reserve to raise interest rates, “it’s more like it is good for risk sentiment.”

A more favourable view of the outlook for the global economy has helped lift equity markets “and the New Zealand dollar seems to benefit from that as well,” he said.

The kiwi dollar has been buoyed by a more optimistic view on the price for raw materials, with the ANZ Commodity Price Index rising for the first time since May last year in January. That added to the upbeat tone set by improving manufacturing sectors in powerhouse economies in Europe, the US and China.

Still, fears about New Zealand’s economy remain, with the Treasury’s briefing to the incoming Finance Minister showing it lowered its forecast for real gross domestic product growth in the year ending March 31 by half a percentage point to 3 percent.

The New Zealand dollar slipped to 63.28 yen from 63.51 yen late yesterday and little changed at 52.59 British pence from 52.64 pence. The kiwi was little changed at 63.26 euro cents from 63.28 cents yesterday, and was almost unchanged at 77.75 Australian cents.

(BusinessDesk)

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