NZ dollar gains after Putin changes tack on Ukraine, Australian GDP beats expectations
By Paul McBeth
March 5 (BusinessDesk) - The New Zealand dollar rose after investors regained some confidence when Russian President Vladimir Putin toned down his rhetoric over the Crimean Peninsula, and after Australia’s economy grew more than expected in the fourth quarter.
The kiwi rose to 83.94 US cents at 5pm in Wellington from 83.73 cents at 8am, up from 83.64 cents yesterday. The trade-weighted index increased to 78.87 from 78.60 yesterday.
Stocks across Asia followed Europe and Wall Street higher after Russia’s Putin told a news conference he saw no need to use military force in Ukraine’s Crimea region for now. The prospect of an invasion sapped investors’ appetite for risk-sensitive assets.
“The market might try to take it (the kiwi) a bit more to the upside, but it depends on Mr Putin in the near-term,” said Imre Speizer, market strategist at Westpac Banking in Auckland. “I’ve got a slightly positive bias overall.”
Westpac’s Speizer said traders will be watching US employment figures on Friday in Washington, and they may be weather-affected by the harsh winter conditions. A softer US labour market would support the kiwi against the greenback, he said.
Australia’s economy grew 0.8 percent in the December quarter, ahead of the 0.7 percent growth forecast, as households increased spending and cut saving in a low interest rate environment. The kiwi traded at 93.70 Australian cents at 5pm in Wellington from 93.67 cents yesterday.
New Zealand government figures showed local construction activity shrank 1 percent in the December quarter as commercial work tapered off, while residential house-building remained strong.
Dairy prices fell 4 percent on a trade-weighted basis, with a 5.7 percent slide in the price of whole milk powder on Fonterra Cooperative’s GlobalDairyTrade auction.
The local currency climbed to 85.76 yen at 5pm in Wellington from 84.98 yen yesterday, and advanced to 61.13 euro cents from 60.91 cents. It increased to 50.35 British pence from 50.21 pence yesterday.