NZ dollar reaches new post-float high after upbeat U.S. data

NZ dollar reaches new post-float high after upbeat U.S. data, EU rate hike

By Jason Krupp

July 8 (BusinessDesk) - The New Zealand dollar rose to a fresh post float higher of 83.30 U.S. cents, after a run of strong U.S. private payroll data and a rate hike by the European Central Bank saw equity and commodity markets rally.

The kiwi and Australian dollar were among the best-performing currencies, with gains on global equity and commodity markets driving demand for growth-linked currencies. The 'risk-on' signal was triggered by stronger-than-expected ADP data which showed U.S. companies added 157,000 workers to their payrolls in June, significantly higher than the 70,000 forecast by a Bloomberg poll. That was bolstered by a decline in U.S. jobless claims to 418,000 last week, lower than the 420,000 expected.

Non-U.S. currencies also received a boost after the European Central bank raised its official interest rate by 25 basis points to 1.5%. The kiwi dollar tracks the performance of the European single currency closely.

On Wall Street, the Standard & Poor's 500 Index rose 1.1% to 1,353.22, its
highest level since May 3. Europe's Stoxx 600 rose 0.4% to 275.93. The 19-commodity Thompson Reuters Jefferies CRB Index rose 1.8% to 346.30, snapping it's a recent run of declines.

"Potentially if we get good non-farm payrolls data out of the U.S. tonight we could be entering a longer term risk on scenario," said Sam Coxhead, a currency adviser at www.DirectFX.co.nz.

The kiwi and Australian dollar have also been helped by "by a lack of a better alternatives - it's not part inviting to be in the euro with the debt issues looking fairly intense or the greenback with the U.S. economy in a really slow grind," he said.

The kiwi recently traded at 82.24 U.S. cents, up from 82.71 cents yesterday,
and gained to 71.77 on the trade-weighted index of major trading partners’ currencies from 71.38. It rose to 77.15 Australian cents from 76.94 cents yesterday, and gained to 67.53 yen from 66.94 yen. It rose to 57.94 euro cents from 57.66 cents yesterday, and climbed to a fresh historic high of 52.08 pence from 51.74 pence previously.

The Australian employment data showed the economy added 23,400 in June, led by a jump in full-time jobs. That was higher than the 15,000 increase expected by the market, according to Bloomberg. The jobless rate held at 4.9%.

The kiwi may trade between a range of 8275 U.S. cents and 83.55 cents, according to ANZ New Zealand.

(BusinessDesk)

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