NZ dollar maintains its strength against rising US currency as local economy grows
By Tina Morrison
March 21 (BusinessDesk) – The New Zealand dollar held its ground against a stronger US currency overnight, as investors gained confidence from the South Pacific nation’s strong domestic economy after fourth-quarter growth met expectations.
The kiwi edged up to 85.31 US cents at 8am in Wellington, from 85.27 cents at 5pm yesterday. The trade-weighted index increased to 80.04 from 79.90 yesterday.
The US dollar index, which measures the greenback against a basket of currencies, advanced after the Federal Reserve signalled US interest rates may rise faster than traders were anticipating as the world’s largest economy improves. Still, support remains buoyant for the New Zealand currency after a report yesterday showed gross domestic product rose 0.9 percent in the last three months of 2013.
“There’s been further US dollar strength overnight and the New Zealand dollar has withstood that, and with the Australian dollar, it has moved alongside the US dollar,” said Peter Cavanaugh, client adviser at Bancorp Treasury Services. “The US has got a better story than major economies outside of China and New Zealand has got an even better story.”
The New Zealand dollar weakened to 94.36 Australian cents from 94.54 cents yesterday.
In New Zealand today, February reports are due for ANZ Job Advertisements, net migration and credit card spending. The ANZ-Roy Morgan Consumer Confidence Index for March is also scheduled for publication.
Strong prints from migration and credit card spending would reinforce expectations that the Reserve Bank of New Zealand will raise the benchmark interest rate at the next couple of meetings, said Bancorp’s Cavanaugh. The bank hiked rates at this month’s meeting by a quarter point to 2.75 percent.
The kiwi advanced to 87.40 yen from 87.26 yen yesterday, jumped to 51.68 British pence from 51.54 pence and increased to 61.89 euro cents from 61.64 cents.