Sharechat Logo

NZ dollar advances as higher yields lure investors amid weaker US data

Friday 27th September 2013

Text too small?

The New Zealand dollar advanced as weaker data out of the US enticed investors to the higher-yielding local currency.

The kiwi gained to 82.75 US cents at 8am in Wellington, from 82.52 cents at the 5pm market close yesterday. The trade-weighted index rose to 77.22 from 76.89 yesterday.

Demand for the greenback waned as US data on durable goods, inflation, second quarter growth and Kansas City Fed manufacturing failed to meet expectations. That increased demand for the carry trade, where investors borrow in low-interest rate currencies to buy higher-yielding assets, benefiting the kiwi.

"The balance of the US data overnight supported a weaker scenario," said Sam Tuck, senior manager FX at ANZ New Zealand. "If you want to play the carry game, kiwi is the obvious choice. We are the highest yielder and we have got the most optimistic profile for our yield curve. The RBNZ is likely to be the first developed world central bank increasing rates next year."

New Zealand's Reserve Bank will publish details of its monthly currency flows for August at 3pm today.

The New Zealand dollar advanced to 88.50 Australian cents at 8am in Wellington, from 88.08 cents at the 5pm market close in Wellington and rose to 81.85 yen from 81.52 yen. The local currency gained to 51.61 British pence from 51.32 pence and increased to 61.39 euro cents from 61.01 cents.

BusinessDesk.co.nz



  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:

AIA June 2020 Monthly Traffic Update and July 2020 Preview
PCT - Delivering on strategy underpins strong operating result
KFL - August 2020 monthly update
BRM - August 2020 monthly update
MLN - August 2020 monthly update
Further COVID-19 Restrictions at SkyCity’s New Zealand Properties
FY20 results guidance met, Results date, Banking Facility
Sky sells OSB assets to NEP NZ, secures 10 year partnership
NZX fully operational - announcement re COVID-19
Heartland Market Update

IRG See IRG research reports