Sharechat Logo

Dollar may rise on stronger commodities

By Paul McBeth

Friday 20th February 2009

Text too small?
The New Zealand dollar may push higher as commodity prices bounce back from multi-year lows, and the yen weakens on concern Japan, the world's second-biggest economy, will delay its stimulus plans.

The Reuters Jeffries CRB index, a broad measure of the price of raw materials, rose 1.3% as demand for oil and copper picked up. Figures this week showed Japan's fourth-quarter gross domestic product fell 3.3%, while Finance Minister Shoichi Nakagawa resigned, sparking concern fiscal spending plans will be delayed.

"The yen has lost its lustre" with the bleak outlook for the Japanese economy, said Danica Hampton, currency strategist at Bank of New Zealand. "The risk to the kiwi is that it may nudge a little higher."

The kiwi fell to 51.32 US cents from 51.41 cents yesterday and rose to 48.39 yen from 48.07. It dropped to 79.42 Australian cents from 79.51 cents yesterday, and declined to 40.49 euro cents from 40.65 cents. The yen was weaker against the US dollar, which is buying 94.37 yen, up from 93.32 yesterday.

Hampton said the New Zealand dollar may trade between 51 US cents 52 cents today, and if it manages to break the topside, may rise as high as 52.50 cents.

Limiting the kiwi advance, figures showed continuing jobless claims in the US rose to just under five million in the weak ended Feb. 8. Weak fourth quarter sales for Hewlett-Packard Co., the world's largest maker of personal computers, contributed to a turnaround in US stocks, with the Dow Jones Industrial Average down 0.7%.

National Bank of New Zealand Regional trends survey indicator, which breaks down economic growth by region, fell 0.1% in the fourth quarter, its fourth consecutive decline in the series, according to a report yesterday. The fall was smaller than the previous quarter, and Hampton said "it would seem to limit the odds of New Zealand's Q4 GDP being as shockingly bad as we've already reported for most other countries". The BNZ forecasts a contraction of 0.6% for the fourth quarter GDP, which will be announced on Mar. 27.

  General Finance Advertising    

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.

Related News:

NZ dollar gains on G20 preference for growth
NZ dollar dips as Wellington CBD checked for quake damage
NZ dollar gains, bolstered by RBA minutes, strong dairy prices
NZ dollar falls after central bank says it may scale up currency intervention
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington