NZ dollar holds gains as investors await signs of US economic recovery
By Paul McBeth
March 26 (BusinessDesk) - The New Zealand dollar held gains in local trading as a lack of hard economic data this week has investors waiting for signs of recovery in the US.
The kiwi traded at 85.83 US cents at 5pm in Wellington from 85.73 cents at 8am, up from 85.51 cents yesterday. The trade-weighted index advanced to 80.16 from 79.92 yesterday.
Traders are looking for signs of recovery in the US as the world’s biggest economy was hampered by harsh winter conditions in recent months, with next week’s non-farm payrolls report seen as the next piece of major data. A weaker than expected Richmond Fed manufacturing report weighed on the greenback in Northern Hemisphere trading, and a settling down of the tensions between Russia and western nations has encouraged investors to chase riskier assets.
“Everything is creeping higher, and it seems more like the US dollar is getting further and further behind,” said Alex Hill, head of dealing at HiFX in Auckland. “We’re waiting to see whether the US data is going to do the trick for us” by bringing down the kiwi dollar, he said.
The Reserve Bank of Australia today said low interest rates can’t support house price gains forever, and encouraged lenders to steer away from lax standards to boost profits, in its financial stability review. New Zealand’s currency was little changed at 93.55 Australian cents from 93.58 cents yesterday.
The kiwi rose to a four-month high against the euro, and was at 62.15 euro cents at 5pm in Wellington from 61.82 cents yesterday after the European Central Bank indicated it was open to injecting more stimulus into the regional economy.
The kiwi was little changed at 51.91 British pence at 5pm in Wellington from 51.84 pence yesterday, and rose to 87.78 yen from 87.50 yen.