Kiwi gains as US employment figures looms, Asian stocks rally
(BusinessDesk) The New Zealand dollar gained as stock markets across Asia rallied on growing optimism the world's major central banks will support global growth as US employment figures loom.
The kiwi rose to 82.41 US cents at 5pm in Wellington from 82.14 cents at 8am and 82.06 cents yesterday. The trade-weighted index fell to 73.35 from 73.55.
Investors were buoyed by European Central Bank president Mario Draghi affirming the bank's support for the euro at yesterday's monetary policy review and the minutes to the last Federal Open Market Committee meeting which showed the Fed will not let its asset-buying programme won't be allowed to disrupt markets.
Stocks across Asia rallied on the Northern Hemisphere central banks' statements, with Hong Kong's Hang Seng Index up 0.3% in afternoon trading and Australia's S&P/ASX 200 index up 0.8%.
Traders are preparing for US non-farm payrolls, which are expected to show the world's biggest economy added more than 100,000 jobs last month, with employment the major focus for the Federal Reserve in assessing the recovery.
"If there's nothing too exciting in non-farm payrolls, the kiwi might press back a little higher to 82.50/82.75 US cents," says Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. "The kiwi should be alright if volatility stays low."
The Bank of Japan kept its benchmark uncollateralised overnight call rate at between zero and 0.1% and held its asset purchase programme, though it flagged a weaker growth outlook for the world's third-biggest economy.
The bank expanded its money printing programme by 10 trillion yen in September. The kiwi was little changed at 64.52 yen from 64.55 yen yesterday.
It fell to 63.31 euro cents from 63.47 cents yesterday, edged down to 50.86 British pence from 50.95 pence and was little changed at 80.26 Australian cents from 80.33 cents yesterday.