The New Zealand dollar rose above 85 US cents for the first time in two months as global equity markets rose, local business confidence improved and Federal Reserve chairman Ben Bernanke gave no hint that quantitative easing could end.
The kiwi advanced to 85.21 US cents, rising above 85 cents for the first time since February 15, from 84.86 cents at 5pm in Wellington yesterday. The trade-weighted index gained to 78.35, having earlier touched a post-float record 78.46, from 78.24 yesterday.
On Wall Street, the Dow Jones Industrial Average rose 0.4 per cent to a record close, led by companies tied to economic growth including Microsoft and Chevron. Conditions look relatively favourable for the kiwi, after the Quarterly Survey of Business Opinion Business showed confidence is at its strongest since June 2007, while Chinese trade data today is expected to show a rebound in exports and imports and Bernanke avoided making much comment about the US economy in a speech yesterday.
"The upward grind in global equity markets continues," said Imre Speizer, senior markets strategist at Westpac Banking Corp. "Momentum in risk sentiment remains positive and that's supportive for the kiwi."
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The New Zealand dollar may trade in a range of 84.65 US cents to 85.37 cents today, Speizer said.
Locally, electronic card transaction figures for March are due out this morning, which may show spending fell back in the latest month after a jump in February, Speizer said. Westpac is forecasting no change in the month.
China's trade balance, out this afternoon New Zealand time, follows figures yesterday that suggested New Zealand's second-largest export market is growing without fuelling inflation.
The kiwi rose to 84.35 yen from 84.21 yen and slipped to 81.21 Australian cents from 81.35 cents. It was little changed at 65.08 euro cents and edged up to 55.62 British pence from 55.56 pence.