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NZ dollar rises above 85 US cents, reaches 3-year high vs. Australian dollar

Friday 26th April 2013

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The New Zealand dollar climbed above 85 US cents and reached the highest level against the Australian dollar since October 2009 as improving risk sentiment and the nation's economic prospects drive demand for the kiwi.

The kiwi dollar recently traded at 84.90 US cents, having climbed as high as 85.62 cents overnight, from 85.23 cents in Asia yesterday. The trade-weighted index fell to 78.60 from 78.82.

US stocks have gained for five straight days, helped by better-than-expected corporate earnings and economic data that beat estimates. US Labor Department figures showed applications for jobless benefits fell more than expected last week, while in the UK, gross domestic product rose at a faster-than-expected 0.3 percent clip in the first quarter.

"The kiwi continues to be one of the best-performing currencies globally," said Dan Bell, currency strategist at HiFX. "Risk sentiment continues to remain upbeat."

The New Zealand dollar may trade in a range of 84.50 US cents to 85.50 cents today, Bell said.

The kiwi slipped to 82.51 Australian cents from 82.65 cents yesterday, having reached 82.85 cents, the highest since October 2009. That has given momentum to other kiwi cross rates, Bell said.

For today, traders will keep one eye on merchandise trade figures for March for any signs that a slowing pace of growth in China is denting exports. A monthly surplus of $373 million is forecast in a Reuters survey, for an annual deficit of $970 million.

The Bank of Japan is also scheduled to release its decision on interest rates, which is expected to see them held near zero as it cranks up its printing presses.

US first quarter GDP is expected to show an annual 3 percent pace of when it's released on Friday in Washington.

The kiwi fell to 84.39 yen from 84.64 yen and was little changed at 65.33 euro cents. It dropped to 55.04 British pence from 55.68 pence following the stronger-than-expected GDP figures.

BusinessDesk.co.nz



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