Kiwi breaks above 84 cents as risk appetite improves, stocks rise

The New Zealand dollar rose above 84 cents for the first time since December 19 as US stocks advanced on optimism the earnings season will provide evidence the world’s biggest economy is reviving.

The kiwi traded at 83.82 US cents from 83.81 cents at 5pm in Wellington yesterday, having earlier climbed as high as 84.09 cents. The trade-weighted index rose to 75.54 from 75.44.

Equities in the US and Europe rose after Alcoa's better-than-expected fourth-quarter revenue helped bolster optimism that US corporate results might beat expectations.

The company also predicted worldwide demand for aluminum will rise 7 percent in 2013.

The Dow Jones Industrial Average climbed 0.3 percent. Mike Jones, strategist at Bank of New Zealand, says demand for New Zealand bonds is also underpinning the kiwi.

“A combination of perky global equity markets and offshore demand for NZ bonds has seen the NZD outperform over the past 24 hours,” Mr Jones says. “However, the NZD/USD was unable to sustain a foothold above 0.8400, thanks to the headwinds from a stronger USD.”

New Zealand 10-year bonds are yielding about 3.55 percent, or about 170 basis points more than comparable 10-year US Treasuries.

Traders will be looking ahead to merchandise trade figures for November, expected to show the deficit narrowed to $620 million in the month from $718 million, for an annual gap of $1.34 billion.

The kiwi rose to 52.31 British pence from 52.22 pence and gained to 64.21 euro cents from 64.08 cents. It traded at 79.78 Australian cents from 79.85 cents and rose to 73.53 yen from 73.28 yen.

(BusinessDesk)

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7856 0.0005 0.06%
AUD 0.8969 0.0010 0.11%
EUR 0.6216 0.0000 0.00%
GBP 0.4895 0.0001 0.02%
HKD 6.0940 0.0040 0.07%
JPY 84.2790 0.1570 0.19%

Commods

Commodity Price Change Time
Gold Index 1241.1 -7.450 2014-10-22T00:
Oil Brent 84.7 -1.510 2014-10-22T00:
Oil Nymex 80.5 -1.970 2014-10-22T00:
Silver Index 17.2 -0.310 2014-10-22T00:

Indices

Symbol Open High Last %
NZX 50 5279.7 5299.9 5279.7 0.25%
NASDAQ 4429.2 4435.9 4419.5 -0.83%
DAX 8934.5 8957.2 8887.0 0.60%
DJI 16615.3 16653.9 16614.8 -0.92%
FTSE 6399.7 6399.7 6399.7 -1.00%
HKSE 23296.0 23397.2 23404.0 -0.53%
NI225 15093.8 15232.5 15195.8 -0.37%