Wall Street gains stoke appetite for NZ dollar

US corporate earnings have exceeded forecasts, boosting demand for more risky investments. File photo
US corporate earnings have exceeded forecasts, boosting demand for more risky investments. File photo

The New Zealand dollar recovered some ground on Friday after figures showed a shrinking US trade deficit and gains on Wall Street helped stoke risk appetite.

The kiwi dollar traded at 83.54 US cents from 83.49 cents in late New York trading on Friday, having recovered from below 83 cents in Asia at the end of last week. The trade-weighted index rose to 75.82 from 75.77.

The US trade deficit in December shrunk to its narrowest in nearly three years, reflecting a decline in the value of imported oil, while the Standard & Poor's 500 Index climbed 0.6 per cent to 1517.93 in New York on Friday after a week in which corporate earnings exceeded forecasts. About 75 per cent of the 341 S&P 500 companies that have released results this reporting season have beaten estimates, Bloomberg reports.

"Financial markets finished last week in a slightly more upbeat frame of mind," Bank of New Zealand strategist Mike Jones said in a report. "NZD/USD fundamentals remain robust and we don't expect to see sustained declines anytime soon."

The New Zealand dollar edged up to 77.47 yen from 77.40 yen after Japanese Finance Minister Taro Aso said the yen has weakened more than intended. It rose to 81 Australian cents from 80.90 cents.

The kiwi bought 62.54 euro cents from 62.50 cents and was little changed at 52.86 British pence.

- BusinessDesk

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a1 at 01 Aug 2014 18:46:56 Processing Time: 669ms