Wednesday 3rd April 2013 |
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The New Zealand dollar gained against most of its trading peers after weak economic figures in Europe and the UK, and rising equity markets stoked demand for so-called risk assets.
The kiwi dollar rose to 84.12 US cents from 84.03 cents at 5pm in Wellington yesterday, having climbed as high as 84.44 cents overnight. The trade-weighted index rose to 77.26 from 76.92.
A gauge of manufacturing in the euro region dropped to a three-month low last month while European unemployment climbed to a record 12 percent in February and a measure of UK manufacturing output shrank more than expected, weakening the euro and the pound. Key economic news is still pending this week, starting with Australian trade figures today, European Central Bank and bank of England decisions Thursday night and US non-farm payrolls on Friday.
"The data out of Europe and the UK was very poor again," said Stuart Ive, a senior trader at HiFX.
Economists expect the US economy added 190,000 jobs in March and Ive said the biggest risk for the kiwi is a weak number, which would keep expectations of Federal Reserve stimulus in place and weigh on the greenback.
The kiwi failed to break through a technical level of 84.50 US cents overnight and may struggle to push higher in the short term, Ive said. "If we saw a break above 84.65 cents it would raise alarm bells to further targets on the upside."
The kiwi dollar didn't move much after the results of the latest GlobalDairyTrade auction showed prices of dairy products surged to a record as traders competed for a shrinking volume of milk powder in the face of the continuing impact of drought. It lifted late yesterday after the Reserve Bank of Australia confirmed interest rates were on hold across the Tasman.
Ive said the auction results aren't as closely watched by currency traders in the Northern Hemisphere.
The kiwi climbed to 80.51 Australian cents from 80.24 cents. It rose to 65.61 euro cents from 65.30 cents and gained to 55.67 British pence from 55.10 pence. The kiwi rose to 78.59 yen from 77.92 yen ahead of the Bank of Japan's statement tomorrow.
BusinessDesk.co.nz
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