Kiwi at 4-month high against Aussie on upbeat RBNZ

The New Zealand dollar rose to a four-month high against its Australian counterpart and gained against the greenback after a more upbeat assessment by the Reserve Bank yesterday stoked investor appetite for the local currency.

The kiwi rose as high as 80.63 Australian cents and traded at 80.48 cents at 8am in Wellington from 80.31 cents yesterday. It climbed to 84.10 US cents from 83.67 cents yesterday.

Reserve Bank governor Graeme Wheeler is set to deliver a speech on improving New Zealand's economy today after holding the official cash rate at 2.5 percent and pointing at the nation's expected recovery over the coming year.

The statement was interpreted by markets as more hawkish, meaning the bank is unlikely to cut interest rates  and increasing investors' appetite to invest in a stable economy.

"New Zealand is one of the few countries that have quite a positive outlook outside East Asia," says Imre Speizer, market strategist at Westpac Banking. "Outside Asian currencies and the kiwi it's hard to see where you'd want to go to make a risk-on currency trade."

The local currency was deemed to be fair value at about 83 US cents, according to the Economist magazine's Big Mac index, which measures the average price of the McDonald's burger.

Australia's currency was knocked yesterday by Standard & Poor's warning the nation's economy faces a potential slowdown as the resources boom fades away.

"The kiwi does look promising, and against the Aussie dollar it looks more promising," Mr Speizer says.

Investors will be looking at Chinese manufacturing figures and US employment data today, with local migration figures unlikely to attract much attention.

The kiwi climbed to 76.81 yen at 8am in Wellington from 75.87 yen yesterday, and increased to 61.94 euro cents from 61.50 cents. It rose to 53.02 British pence from 52.80 pence yesterday.

The trade-weighted index advanced to 75.58 from 75.06 yesterday.

(BusinessDesk)

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7850 0.0000 0.00%
AUD 0.8924 0.0000 0.00%
EUR 0.6196 0.0000 0.00%
GBP 0.4880 0.0000 0.00%
HKD 6.0917 0.0000 0.00%
JPY 84.8970 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1231.3 -0.710 2014-10-24T00:
Oil Brent 86.1 -0.510 2014-10-24T00:
Oil Nymex 81.0 -1.020 2014-10-24T00:
Silver Index 17.1 0.024 2014-10-24T00:

Indices

Symbol Open High Last %
NZX 50 5292.8 5344.4 5341.7 -0.15%
NASDAQ 4459.5 4486.3 4452.8 0.69%
DAX 9008.6 9044.9 9047.3 -0.66%
DJI 16677.0 16811.7 16677.9 0.76%
FTSE 6419.1 6419.1 6419.1 -0.47%
HKSE 23311.9 23352.6 23333.2 -0.13%
NI225 15354.4 15377.0 15139.0 1.01%