NZ dollar gains after manufacturing, consumer confidence

NZ dollar gains as manufacturing, consumer confidence point to stronger economy

By Paul McBeth

Feb. 14 (BusinessDesk) - The New Zealand dollar rose to a 10-day high against the greenback after manufacturing and consumer confidence surveys painted a more optimistic picture of the local economy, and reminded investors by they've had a strong appetite for the currency.

The kiwi climbed to 84.74 US cents at 5pm in Wellington, rising as high as 84.93 cents, from 84.10 cents yesterday. The trade-weighted index advanced to 76.87 from 76.17.

The local currency got a boost from strong second-tier data, with consumer confidence at a 32-month high, according to an ANZ Roy Morgan survey, and manufacturing activity at an eight-month high, based on a BNZ-Business New Zealand series. New Zealand has been a darling among investors as it offers positive returns on governments bonds, and commentators are picking interest rates will rise later this year. The yield on the 10-year government bond was 3.91 percent at 5pm in Wellington.

"It all comes down to the fact that on a relative basis, New Zealand looks pretty good," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. "There's been a lot of interest in the kiwi today, and the moves from the new data sparked a bit of interest."

The kiwi climbed to 79.16 yen at 5pm in Wellington from 78.22 yen yesterday after the Bank of Japan kept the benchmark interest rate at 0.1 percent and reaffirmed its aggressive monetary easing to achieve annual inflation of 2 percent. Official figures showed Japan's economy unexpectedly shrank in the fourth quarter, for an annualised contraction of 0.4 percent.

The local currency rose to a new post-float high against the pound at 54.64 British pence, and trading at 54.60 at 5pm in Wellington from 53.66 pence yesterday. Bank of England governor Mervyn King yesterday said the UK faces weak economic growth in an inflationary environment.

The kiwi climbed to 63.02 euro cents from 62.55 cents yesterday.

(BusinessDesk)

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