NZ dollar rises above 73 US cents to 3-week high on signs of relative economic health
By Jonathan Underhill
April 5 (BusinessDesk) - The New Zealand dollar rose above 73 US cents for the first time in more than a week, and touched a three-week high, as a pickup in consumer confidence, a bigger-than-expected budget surplus and rising property values underlined the relative strength of the local economy.
The kiwi gained to 73.04 US cents as at 8am in Wellington and earlier reached 73.11 cents, the highest since mid-March, from 72.84 cents late yesterday. The trade-weighted index rose to 75.07 from 74.85.
Recent indicators have painted an upbeat picture of the New Zealand economy. Consumer confidence rose last month, according to the ANZ Roy Morgan consumer confidence index, out yesterday, while the government’s operating surplus for the first eight months of the year, at $2.85 billion, topped the Treasury's December forecast of $2.36 billion.
Figures this morning showed the average value of a New Zealand home rose 7.3 percent to $677,618 in the year to March, the biggest gain in nine months. While dairy prices fell at this week's Global Dairy Trade auction, New Zealand's biggest product, whole milk powder, gained.
"NZD benefited from firmer consumer confidence, milk prices, and a better budget balance," said Liz Kendall, senior economist at ANZ Bank New Zealand. "NZD continues to defy gravity with some topside resistance breached overnight. We continue to expect moves will eventually be lower."
Concerns eased in financial markets about the tit-for-tat tariffs announced by China and the US amid optimism they are a sign that the two nations are negotiating and may avert a trade war.
Today, traders may keep a watch out for February trade data in Australia, New Zealand's second-largest market, and in the local market, New Zealand commodity prices for March. Looking ahead, markets will be keeping on eye on any US-China trade developments and also watching for US jobs data later in the week.
The kiwi rose to 94.68 Australian cents from 94.55 cents late yesterday. It increased to 59.48 euro cents from 59.33 cents and gained to 78 yen from 77.61 yen. It rose to 4.6035 yuan from 4.5832 yuan and gained to 51.87 British pence from 51.71 pence.