NZ dollar may rise on commodities, weaker yen
NZ dollar may rise on stronger commodities, weaker yen
By Paul McBeth
Feb. 20 – The New Zealand dollar may push higher as commodity prices bounce back from multi-year lows, and the yen weakens on concern Japan, the world’s second-biggest economy, will delay its stimulus plans.
The Reuters Jeffries CRB index, a broad measure of the price of raw materials, rose 1.3% as demand for oil and copper picked up. Figures this week showed Japan’s fourth-quarter gross domestic product fell 3.3%, while Finance Minister Shoichi Nakagawa resigned, sparking concern fiscal spending plans will be delayed.
“The yen has lost its lustre” with the bleak outlook for the Japanese economy, said Danica Hampton, currency strategist at Bank of New Zealand. “The risk to the kiwi is that it may nudge a little higher.”
The kiwi fell to 51.32 U.S. cents from 51.41 cents yesterday and rose to 48.39 yen from 48.07. It dropped to 79.42 Australian cents from 79.51 cents yesterday, and declined to 40.49 euro cents from 40.65 cents. The yen was weaker against the U.S. dollar, which is buying 94.37 yen, up from 93.32 yesterday.
the New Zealand dollar may trade between 51 and 52 U.S.
cents today, and if it manages to break the topside, may
rise as high as 52.50 cents.
Limiting the kiwi advance, figures showed continuing jobless claims in the U.S. rose to just under five million in the weak ended Feb. 8. Weak fourth quarter sales for Hewlett-Packard Co., the world’s largest maker of personal computers, contributed to a turnaround in U.S. stocks, with the Dow Jones Industrial Average down 0.7%.
National Bank of New Zealand Regional trends survey indicator, which breaks down economic growth by region, fell 0.1% in the fourth quarter, its fourth consecutive decline in the series, according to a report yesterday. The fall was smaller than the previous quarter, and Hampton said “it would seem to limit the odds of New Zealand’s Q4 GDP being as shockingly bad as we’ve already reported for most other countries”. The BNZ forecasts a contraction of 0.6% for the fourth quarter GDP, which will be announced on Mar. 27.