Wednesday 1st February 2012
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The New Zealand dollar rose to a new high against the euro and touched a 4 ½-month high versus the greenback as the nation’s resilient economy and relatively appealing interest rates lured investors in the face of mixed global signals.
The New Zealand dollar rose as high as 63.20 euro cents, the highest since the common currency was issued in 2002, from 62.41 cents late yesterday. It rose to as high as 82.99 US cents, the highest since September, from 82.30 cents yesterday and recently traded at 82.49 cents.
While traders have been heartened by Europe’s progress toward an agreement on controlling its member states’ deficits, negotiations to allow Greece to get its next slice of financial aid have been stalling. Meantime, the kiwi’s gains against the US dollar overnight were eroded when American data printed weaker than expected, sapping optimism the world’s biggest economy is on a firm path to recovery.
“This is the first time in two or three months that we have had weaker-than-expected US data and we have seen the kiwi perform extremely well,” said Stu Ive, currency strategists at HiFX.
European leaders yesterday agreed on a new treaty that allows the enforcement of stricter budget discipline. Britain and the Czech Republic opted out of the pact. In Greece, Prime Minister Lucas Papademos said progress had been made in debt-swap talks with the nation’s bondholders and he wanted to bring the negotiations “to a successful conclusion by the end of the week.”
“There was some hope out there that the situation in Greece would be forthcoming – but the European markets are a mess,” Ive said.
In the US, the Institute for Supply Management-Chicago business barometer expanded at a slower-than-expected 60.2 from 62.2 in December. Consumer confidence fell to 61.1 in January from 64.8 last month, the Conference Board said, while the Standard & Poor’s/Case-Shiller composite index of single-family home prices fell 0.7 percent in November, exceeding the 0.5 percent drop economists expected.
Traders will be looking to China’s January PMI manufacturing data due for release today.
In New Zealand, Fonterra Cooperative Group’s GlobalDairyTrade auction will take place tonight in the US, with results expected to remain at an average winning price of around US $3,700 a tonne, according to ANZ New Zealand economists.
The New Zealand dollar rose to 77.71 Australian cents from 77.36 cents yesterday at 5pm. It traded at 52.35 British pence from 52.30 pence. The kiwi was up at 62.88 yen from 62.75 yen.
The trade-weighted index increased to 72.63 from 72.26.
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