Sharechat Logo

NZ dollar starts 2010 on the front foot as commodities climb

Tuesday 5th January 2010

Text too small?

The New Zealand dollar started 2010 on the front foot, climbing above 73 U.S. cents as investors go into the New Year on an upbeat note.  

The Australian, New Zealand and Canadian dollars gained over the New Year holiday period, along with prices for raw materials as traders bet the so-called "commodity currencies" will repeat their stellar performances of 2009.

The Reuters/Jeffries CRB Index, a measure of 19 commodities, rose 1.9% to 288.90, and investors will be watching to see if dairy prices continue to surge on Fonterra’s globalDairyTrade website when the first auction of the year takes place in the U.S.  Results will emerge early tomorrow morning, NZT. 

“Commodities had a very good year in total and maybe people are seeing the commodity currencies are still the place to be,” said Tim Kelleher, vice president of institutional banking and markets at Commonwealth Bank of Australia.

“The kiwi is very strong on the crosses” and has been underpinned by kiwi/yen buying during the offshore sessions, he said.  

The kiwi climbed to 73.46 U.S. cents from 72.62 cents yesterday and gained to 66.78 on the trade-weighted index, or TWI, a measure of the currency against a basket of five trading partners, from 66.30.

It rose to 67.93 yen from 67.43 yen yesterday and rose to 80.45 Australian cents from 80.33 cents. It increased to 50.88 euro cents from 50.33 cents and advanced to 45.57 pence from 44.96 pence.  

Kelleher said the currency may trade between 73.20 U.S. cents and 73.65 cents today and has resumed the broad range of between 70 cents and 75 cents that it’s been locked in since September.  

“It had a false break before Christmas when it went below 70 (cents), but the bias is on the top side,” he said.  Bullish manufacturing data in China, the U.K. and U.S. helped improve investor sentiment as they prepare for a busy week.

American employment data on Friday will be the big event, though the Federal Open Market Committee minutes from their last meeting will be released tomorrow and the Fed’s Kansas City President Thomas Hoeing will give a speech on Thursday.  

Across the Atlantic, the Bank of England will meet this week though it isn’t expected to change its stance on monetary policy. Any improvement in Euro-zone retail sales and GDP data should continue to support higher-yielding assets such as the kiwi dollar.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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