Friday 5th July 2013 |
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The New Zealand dollar trade weighted index is heading for a 0.9 percent weekly gain as central banks in Australia and Europe kept their easing bias amid uncertain outlooks for their respective economies.
The trade-weighted index rose to 74.59 at 5pm in Wellington from 74.07 yesterday, and was up from 73.89 at the start of the week. The kiwi traded at 78.12 US cents from 73.87 cents at 8am, up from 77.79 cents yesterday. The currency is heading for a 0.3 percent weekly gain against the greenback, starting the week at 78.37 cents.
A BusinessDesk survey on Monday of nine strategists predicted the currency would trade between 75 US cents and 80 cents this week, with a bias to the downside.
The European Central Bank and Bank of England both indicated their key interest rates will stay near-zero for longer, as they deal with a region beset by sovereign debt woes. Earlier this week, the Reserve Bank of Australia said it still has scope to cut rates if its economic outlook deteriorates further.
"The broader theme coming to the fore with risk aversion feeding is New Zealand's relative economic story shining through," said Mike Jones, currency strategist at Bank of New Zealand. "That's why the kiwi has outperformed through the week, particularly against those currencies whose central banks are still pressing the QE (quantitative easing) button."
Markets in the US were closed on Thursday for the Independence Day holiday, though traders will be looking at non-farm payrolls figures on Friday in Washington, with the Federal Reserve putting greater weight on bringing down the country's jobless rate.
The kiwi rose to 51.91 British pence from 50.97 pence yesterday, and climbed to 60.53 euro cents from 59.87 cents. The kiwi advanced to 78.40 yen from 77.68 yen yesterday, and was little changed at 85.51 Australian cents from 85.40 cents.
BusinessDesk.co.nz
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