NZ dollar up as commodities find favour

The kiwi was at 67.16 US cents at 8am in Wellington, from 67.38 cents at the New York close and 66.91 cents at 5pm on Friday. The trade-weighed index increased to 71.77 from 71.59 on Friday.
Photo / iStock
The kiwi was at 67.16 US cents at 8am in Wellington, from 67.38 cents at the New York close and 66.91 cents at 5pm on Friday. The trade-weighed index increased to 71.77 from 71.59 on Friday. Photo / iStock

The New Zealand dollar advanced as currencies linked to commodities came back into favour.

The kiwi was at 67.16 US cents at 8am in Wellington, from 67.38 cents at the New York close and 66.91 cents at 5pm on Friday. The trade-weighed index increased to 71.77 from 71.59 on Friday.

Investors favoured currencies of commodity producing countries such as Australia, New Zealand and Canada as their appetite for higher risk assets linked to global growth improved. The International Energy Agency, which coordinates energy policies of industrialised nations, said on Friday that oil prices might have bottomed as production declines in the US and other non-OPEC producers accelerate and as an increase in Iranian supply proves less dramatic than expected. The CRB Index, which measures a basket of 19 global commodities, touched its highest since early January.

See live rates for the NZ-US $ below. Click for more information:NzForex Foreign Exchange Transfers

"Commodity-linked currencies led gains against the US dollar," Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note. "Sentiment in markets generally improved. Our global risk appetite index pushed above 40 percent for the first time this year."

Still, BNZ's Martin said sentiment toward Australasian currencies may be a bit less warm this morning after the release of weaker Chinese industrial production and retail sales data at the weekend.

China, the largest export market for Australia and New Zealand, reported industrial production rose 5.4 percent in February, the weakest growth rate since the global financial crisis, while retail sales increased 10.2 percent, lagging behind expectations. Fixed asset investment, a proxy for infrastructure and property spending, grew by 10.2 percent, though it was largely driven by the public sector.

In New Zealand today, the BNZ-BusinessNZ Performance of Services Index is published at 10:30am.

The New Zealand dollar slipped to 88.99 Australian cents from 89.31 cents on Friday, and edged lower to 46.71 British pence from 46.87 pence. It advanced to 60.24 euro cents from 59.91 cents, increased to 76.49 yen from 75.92 yen, and gained to 4.3614 yuan from 4.3419 yuan.

- BusinessDesk

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production apcf04 at 28 Sep 2016 16:07:46 Processing Time: 415ms