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NZ dollar gains as better US data helps lift equities

Thursday 28th June 2012

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The New Zealand dollar rose as signs of strength in the US economy lifted equities and demand for growth assets including the kiwi. The local currency rose against the euro on concern this week’s summit of the region’s leaders won’t achieve consensus.

The New Zealand dollar rose to 79.12 US cents just before 8am, from 78.98 cents at 5pm in Wellington yesterday. The trade-weighted index rose to 71.92 from 71.68.

In the US , pending home sales rose 5.9 percent last month and durable goods orders rose 1.1 percent, the first gain since February and more than twice the pace economists had expected. The Standard & Poor’s 500 Index gained about 1 percent while most major equity benchmarks in Europe were stronger.

“The US data was more of a focus overnight – the improved data has pushed the kiwi above 79 cents,” said Stuart Ive, currency strategist at HiFX. “We’re sick of Europe, it is the same story rehashed.

EU leaders are scheduled to meet on Thursday and Friday to discuss the debt crisis. Reuters cited Bridgewater Associates, the world's largest hedge fund, saying that European sovereign and bank deleveraging could be a disorderly event.

In New Zealand, the National Bank Business Outlook, due this afternoon, will be a focus locally today after the measure showed the first decline in 7 months in May.

The kiwi dollar rose to 63.44 euro cents from 63.17 cents and climbed to 63.11 yen from 62.73 yen. The local dollar edged higher to 78.50 Australian cents from 78.45 cents and gained to 50.83 British pence from 50.50 pence.

BusinessDesk.co.nz

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