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NZ dollar gains as upbeat US data stokes demand for growth-linked assets

Friday 23rd December 2011

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The New Zealand dollar gained after better-than-expected US employment and consumer confidence figures stoked investor appetite for growth-linked currencies such as the kiwi.

The kiwi dollar rose to 77.36 US cents just before 8am, from 76.78 cents at 5pm yesterday and reached an overnight high of 77.49 cents. The kiwi dollar rose to 60.43 yen from 59.9 yen yesterday, hitting an overnight high of 60.53 yen.

The US, the world’s largest economy, released better-than-expected labour market data underpinning hopes the pace of recovery is gaining momentum. Consumer confidence strengthened more than expected in December to a six-month-high, while jobless claims dropped to their lowest level in 3 1/2 years last week.

“Better US numbers keep piling on and the New Zealand dollar is out performing as US stocks grind higher,” said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York. “It’s good news for the kiwi.”

Helping stoke optimism for a recovery in global growth, UK gross domestic product for the third quarter grew 0.6 percent, up from an initial estimate of 0.5 percent. International visitor arrivals for November are released this morning, the final piece of pre-Christmas data.

The kiwi advanced to 76.31 Australian cents from 76.1 cents. It increased to 59.29 euro cents from 58.80 cents yesterday, and gained to 49.34 British pence from 49.01 pence. The trade weighted index increased to 66.16 from 68.77 at 5pm yesterday.

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