NZ dollar gains on better-than-expected US data

Friday 24th February 2012

The New Zealand dollar rose against the greenback as US jobless claims and housing data beat estimates, stoking optimism for global growth and demand for high-yielding currencies.

The New Zealand dollar rose as high as 83.51 US cents overnight and traded at 83.23 cents at 8am up from 82.81 cents yesterday at 5pm.

Applications for U.S. jobless benefits were unchanged in the week ended Feb. 18 at 351,000, the lowest since March 2008, Labor Department figures showed. The medium projected in a Bloomberg survey was for 355,000 claims. A report from the Federal Housing Finance Agency showed that a gauge of home prices rose 0.7 percent in December, beating estimates.

“It was a tepid recovery overnight,” said Tim Kelleher, head of institutional FX sales NZ ASB Institutional. “A little bit of a relief recovery for the kiwi.”

Kelleher said the New Zealand dollar will continue to trade between 80 US cents to 85 cents ahead of the European Central Banks second tranche of three-year loans next week and as investors continue to mull the details of a second bail-out package for Greece.

“The New Zealand dollar is washing around a bit – but it is not the start of a downward trend there is just a bit of pressure on the crosses,” Kelleher said.

In Germany, the Munich-based Ifo institute business climate index rose to 109.6 in February from 108.3 in January, its fourth straight gain. Economist surveyed in a Bloomberg poll had forecast for an increase to 108.8.

In the UK, factory orders rose to a six-month high in February to minus 3 from minus 16 in January, the Confederation of British Industry said in a report. The regions gross domestic product for the fourth quarter is released today with, economists in a Bloomberg survey predicting the economy to have shrunk 0.2 percent.

Greece's parliament will meet to endorse a bond swap for private holders of its debt as it moves towards cutting its liabilities by 100 billion euros. The swap starts on Friday.

In New Zealand there is no significant data set for release today.

The New Zealand dollar rose to 77.98 Australian cents from 77.87 cents yesterday at 5pm. It advanced to 52.98 British pence from 52.84 pence. It gained to 66.69 yen from 66.46 yen.

The kiwi was little changed on 62.44 euro cents from 62.49 cents.

The trade-weighted index increased to 73.39 from 73.23.

(BusinessDesk)

BusinessDesk.co.nz

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