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NZ dollar gains from 3-week low after Spanish bond sale; healthier US data

Friday 16th December 2011 1 Comment

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The New Zealand dollar rose from a three-week low after a successful Spanish bond auction and healthier-than-expected US and European data eased fears the global economy is heading for a slowdown.

The kiwi rose to 75.47 US cents just after 8am, from 74.73 US cents at 5pm. The trade-weighted index increased to 67.81 from 67.34.

Spain paid 2 percentage points less to borrow over 5-years than Italy had a day earlier, a sign investors believe the heavily indebted euro nation’s budget cuts may help it avoid default.

US figures showed the number of Americans filing new claims for jobless benefits fell to the lowest level in three years while manufacturing output in Germany and France shrank less than expected this month.

“We have had a fair bit of encouraging news” for the kiwi, said Mike Burrowes, market strategist at Bank of New Zealand. “It is now taken as a positive that you can issue your debt,” he said of the Spanish sale.

The positive data helped equity markets. In New York, the Dow Jones Industrial Average gained 0.5 percent, the Standard & Poor's 500 Index advanced 0.4 percent.

The kiwi rose to 57.99 euro cents from 57.44 yesterday and 48.67 British Pence from 48.36 pence. It was up 58.77 yen from 58.40 and 75.87 Australian cents from 75.53.

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Comments from our readers

On 16 December 2011 at 12:49 pm Duncan said:
Don't be fooled the euro is headed for meltdown
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