NZ dollar gains as Asian stocks rally on delays to Syrian intervention, Chinese manufacturing
By Paul McBeth
Sept. 2 (BusinessDesk) - The New Zealand dollar rose with stocks across Asia after US President Barack Obama put plans to bomb Syria on hold and as Chinese manufacturing figures beat expectations, lifting optimism about growth assets.
The kiwi rose to 77.90 US cents at 5pm in Wellington from 77.60 cents at 8am and 77.19 cents on Friday in New York. The trade-weighted index was little changed at 73.87 from 73.86 last week.
Stocks across Asia rose as investors were buoyed by US President Obama’s decision to seek Congressional authorisation before launching a military strike on Syria in retaliation for that regime’s presumed chemical weapon strike on civilians. The delay in any Western-led attack has calmed fears in financial markets, which have been concerned about the fallout from military intervention.
A 16-month high in a gauge of Chinese manufacturing added to investors’ optimism. Japan’s Nikkei 225 Index rose 1.4 percent at 5pm in Wellington, Hong Kong’s Hang Seng was up 1.9 percent and Australia’s S&P/ASX 200 index gained 1 percent.
“The kiwi’s squeeze higher came over the weekend when Obama said he’s not going to war just now, and on the Chinese data,” said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. “Asian equity markets pushed up a bit today with ‘risk on’ on the back of the weekend news.”
Trading is expected to be thin due to the US Labor Day holiday.
New Zealand’s terms of trade rose 4.9 percent in the second quarter, beating estimates, underpinned by rising dairy prices and a sharper decline in import prices, according to Statistics New Zealand.
A BusinessDesk survey of 10 strategists and traders predicts the local currency will trade between 76 US cents and 80.50 cents this week. Five expect the currency to advance, three expect it to decline and two say it will likely remain unchanged.
In the first of several central bank meetings this week, the Reserve Bank of Australia reviews monetary policy tomorrow and is expected to keep its key rate at 2.5 percent. The kiwi rose to 76.85 Australian cents from 86.70 cents on Friday in New York.
The local currency gained to 76.79 yen at 5pm in Wellington from 75.76 yen last week and rose to 59 euro cents from 58.37 cents. It advanced to 50.07 British pence from 49.76 pence last week.