Oil prices came off a 12-year low yesterday. Photo / AP
Oil prices came off a 12-year low yesterday. Photo / AP
The New Zealand dollar rose yesterday as oil prices gained from a 12-year low and Chinese stocks gained in afternoon trading, easing investors' fears about the world's second-biggest economy and its impact on commodity producing nations.
The kiwi increased to US65.64c at 5pm in Wellington from US65.36c at 8am. Thetrade-weighted index was little changed at 72.30 from 72.27 yesterday.West Texas Crude oil prices bounced from a 12-year low US$29.93 a barrel in local trading yesterday, soothing investors' nerves about commodity-linked currencies such as the kiwi and Australian dollars.
Meantime, the Shanghai Composite index slipped 0.1 per cent in afternoon trading and better than expected Chinese trade figures allayed concerns about Australasia's biggest trading partner. The People's Bank of China again left the mid-point of the yuan's trading band little changed when it fixed the rate.
"The pop up in the crude oil price and what appears to be the plateau in China with the yuan and the composite index both behaving themselves to a degree has added confidence in the market," said Stuart Ive, senior dealer foreign exchange at OMF in Wellington.
"Hence, why the kiwi and the Aussie have popped a little bit."
OMF's Ive said the kiwi could be in for a relief rally having dropped US3c since Christmas, though it will probably need more local data to support such a move.
Traders will be watching International Energy Agency figures on global oil supplies for a steer on commodity prices after the slump in oil prices, which will also have a bearing on central banks as they assess their own inflation tracks.
New Zealand's two-year swap rate was unchanged at 2.74 per cent and 10-year swaps were unchanged at 3.56 per cent.
