NZ dollar gains as weaker US data, Yellen testimony weigh on greenback

Monday 18th November 2013

The New Zealand dollar rose as weaker data out of the US and comments by Federal Reserve nominee chair Janet Yellen increased bets the Fed won't pull back on its stimulus programme anytime soon.

The kiwi advanced to 83.45 US cents at 8am in Wellington, from 83.41 cents at the New York close and 82.90 cents at the 5pm market close in Wellington on Friday. The trade-weighted index increased to 77.94 from 77.54 on Friday.

The greenback weakened amid concern about the pace of revival in the world's largest economy after reports on October industrial production and the Empire Manufacturing index for November failed to meet expectations. That came after comments by Yellen at her confirmation hearing before the Senate Banking committee that the Fed will keep its US$85 billion a month stimulus programme intact until the US economy shows more strength and stability.

"Disappointing US data releases early on Saturday morning saw the USD extend some of its 'Yellen-inspired' weakness," Kymberly Martin, strategist at Bank of New Zealand, said in a note. "The NZD was a beneficiary."

In New Zealand today, traders will be eyeing the Performances Services Index for October at 10:30am, to see if it shows broad based economic momentum in line with last week's manufacturing index.

The New Zealand dollar currently has support at 82.70 US cents and resistance at 83.60 cents, Martin said.

Traders will also keep an eye on a report on Chinese October property prices today for an indication of how Asia's largest economy is tracking.

The kiwi rose to 88.99 Australian cents from 88.64 cents on Friday and advanced to 83.67 yen from 83.08 yen. The local currency increased to 51.75 British pence from 51.60 pence on Friday and gained to 61.82 euro cents from 61.61 cents.

BusinessDesk.co.nz

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