By Jonathan Underhill
Dec. 28 (BusinessDesk) - The New Zealand dollar rose to a two-month high in subdued holiday season trading after US consumer confidence fell and the kiwi benefitted from gains in commodity-linked currencies.
The kiwi rose to 70.67 US cents as at 8am in Wellington, and earlier touched 70.78 cents for the first time since Oct. 19, from 70.46 cents late yesterday. The trade-weighted index rose to 74.07 from 73.96.
The US Conference Board's consumer confidence index fell to 122.1 this month from a revised 128.6 in November, when it reached a 17-month high, helping drive the US dollar index to its lowest level in more than three weeks. The CRB Index of 19 commonly traded commodities rose 0.5 percent to its highest in a month as crude oil and copper gained, helping lift currencies of producers such as Canada and Australia.
"US consumer confidence was less than expected and that's led to a broad US dollar selloff," said Stuart Ive, a senior dealer at OMF. "When the US dollar falls, commodity currencies tend to outperform. Oil and copper are supporting the Aussie and the Canadian dollar."
Ive said during the holiday season trading flows in foreign exchange markets are about 20 percent below normal levels. There has been a continuation of softness in the greenback "but that could change dramatically in January as the potential of (US) tax reforms starts taking a grip," he said.
The kiwi fell to 90.87 Australian cents from 91.03 cents late yesterday. It rose to 80.02 yen from 79.78 yen and rose to 4.6331 yuan from 4.6180 yuan. It was little changed at 59.39 euro cents from 59.38 cents and rose to 52.73 British pence from 52.67 pence.