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Kiwi trades at new post-float high

Monday 30th May 2011

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The New Zealand dollar has broken through to a new post-float high today in the wake of much better than expected traded data.

The NZ dollar traded to US82.16c in late morning trading, which is the highest level since it was set free in March 1985. The previous post-float high was US82.15c.

The breach was expected as the NZ dollar was well-bid last week on speculation of Chinese investment in this country and the US dollar has been under pressure from ongoing doubts about the performance of the United States economy.

Imre Speizer, senior strategist at Westpac, said the move came about 25 minutes after stronger than expected trade data was released this morning.

The NZ dollar appeared to have momentum and could push on higher. It has settled back around US82c since setting the record.

Exports were 17% higher than a year earlier to a new high at $4.7 billion in April, while imports lifted 7.2% to $3.5 billion, Statistics New Zealand (SNZ) said today.

The milk powder, butter and cheese grouping recorded a 32% rise.

The NZ dollar had traded in a range between about US81.90c and US81.40c, since its Friday afternoon surge took it through a key resistance level.

From US81.69c at 5pm on Friday, the NZ dollar was buying US81.93c at 8am today, amid speculation that China's sovereign wealth fund, the Chinese Investment Corporation (CIC), is investing heavily in this country, including in government bonds.

The NZ dollar was also at A76.72c in early afternoon trading, its highest level since February 2, from A76.37c at 8am today.

After peaking at a four-month high near 0.5760 euro early on Friday afternoon, the NZ dollar has eased lower to 0.5740 by late morning.

The euro rose against the US dollar, as European officials said Greece should be able to shoulder its heavy debt burden without restructuring.

The NZ dollar was little changed at 66.37 yen, while the trade weighted index rose to 70.79 from 70.57 at 5pm on Friday.

 

NZPA



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