NZ dollar climbs back above 69 cents ahead of China CPI, Australian jobs data

Thursday 11th February 2010

The New Zealand dollar, which briefly slipped below 69 US cents overnight, edged higher ahead of inflation figures out of China and employment data in Australia that will provide a clue to the prospects for the biggest kiwi export market.

Investors are watching for signs of accelerating inflation in China because the central bank has signaled it is intent on cooling the world’s fastest-growing major economy. That, in turn, may dent demand for Australia’s mineral exports from China which helped the ‘lucky country’ avoid recession last year. Inflation in China may have increased to 2.1% last month. In Australia, employment data may show the jobless rate rose to 5.6%.

The kiwi dollar was weaker overnight after Federal Reserve chairman Ben Bernanke said in written testimony to the House Financial Services Committee that the fed may raise its discount rate “before too long” while repeating that low rates are warranted “for an extended period.” Meantime, speculation grew that European Union leaders will stop short of announcing an aid package for Greece when they meet today.

“Global sentiment will remain key to the near-term fortunes of the NZD/USD,” Danica Hampton, currency strategist at Bank of New Zealand, said in her morning commentary. “In the absence of a melt-down in Asian equities, we suspect dips will be limited to 0.6880. Some headwinds are expected ahead of 0.6990-0.7000.”

The New Zealand dollar edged up from US 69.32 cents to 69.42 cents late yesterday. Against the Australian dollar which traded at 79.13 cents from 79.21 cents.

The kiwi bought 62.39 yen, up from 62.20 yen yesterday and gained to 50.50 euro cents from 50.39 cents.

The traded-weighted index, or TWI, climbed from 64.26 to 64.39.

Businesswire.co.nz

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