Support our sponsors:

NZX 50 Index	3326.74	0.00
S&P/ASX 200	4282.90	7.80
Dow Jones Industrials	12884.00	5.80

Twitter

Facebook

RSS

NZ dollar pushes above 74 US cts ahead of NZIER's QSBO

Tuesday 12th January 2010

Text too small?

The New Zealand dollar rose above 74 U.S. cents ahead of today’s Quarterly Survey of Business Opinion which is expected to show continued growth in firms’ expectations in profitability and employment this year.

The New Zealand Institute of Economic Research’s QSBO is closely watched by the Reserve Bank, and though the headline confidence figure is likely to be flat after it hit a decade high last quarter, Westpac economists are bullish on the prospects for companies’ hiring intentions, own activity and profit expectations.

The kiwi dollar extended its gain against the greenback amid strong risk appetite after China reported a surge in imports and exports last month from a year earlier.

The Volatility Index, a measure of the cost of insuring put options on the Standard & Poor’s 500 commonly known as Wall Street’s ‘fear gauge’, dropped 3.4% to 17.7, having earlier fallen to a 20-month low 17.

“The kiwi and Aussie will do well as long as China does well,” said Imre Speizer, markets strategist at Westpac Banking Corp., referring to the trans-Tasman currencies colloquially.

“Today’s data could have a big bearing” on whether it continues to climb higher, he said.

The New Zealand dollar rose to 74.21 U.S. cents from 73.95 cents yesterday and gained to 67.01 on the trade-weighted index, or TWI, a measure of the currency against a basket of five trading partners, from 66.79.

It was little changed at 68.28 yen from 68.26 yen yesterday and climbed to 79.73 Australian cents from 79.39 cents. It rose to 51.08 euro cents from 50.93 cents yesterday and increased to 46.05 pence from 45.85 pence.

Speizer said the currency may trade between 73.60 U.S. cents and 74.30 cents today, though if the upper limit breaks, it could rise sharply.

“If it carries on marching up from here, it could be up to 75 U.S. cents quite quickly,” he said “I’m still quite bullish on the kiwi having a crack at its recent 76.30 cents high.”

The greenback came under pressure yesterday after St Louis Federal Reserve President James Bullard reinforced the view that the Fed will keep interest rates low “for quite some long while into the future.

Fourth quarter earnings season kicks off in the U.S. today, with aluminium producer Alcoa Inc. due to report after Wall Street closes.

Businesswire.co.nz

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.