Kiwi gains as Wall St rallies, TWI at 5.5-year high

The New Zealand dollar gained against the greenback and reached a 5.5-year high on a trade-weighted basis as improving US employment figures underpinned a rally on Wall Street and stoked investor appetite for higher-yielding assets.

The kiwi was unchanged at 84.53 US cents at 8am in Wellington from the close of trading on Friday in New York, and up from 84.10 cents at New Zealand's close last week. The trade-weighted index was little changed at 76.17 from 76.13 at the close of New York trading, and up from 75.64 in Wellington last week.

Stocks on Wall Street gained with the Standard & Poor's 500 and Dow Jones Industrial Average both up 1 percent after government figures showed the US added 157,000 jobs in January and revised up earlier months.

The kiwi has been rallying on the relative strength of New Zealand's economy, which is expected to get a boost from the Canterbury rebuild this year, and on the stance of Reserve Bank governor Graeme Wheeler, who does not seem keen on cutting interest rates.

"Fundamentals and the central bank are going your way and offshore risk appetite is going your way as well," says Imre Speizer, market strategist at Westpac Banking in Auckland. The kiwi "still looks like it's going to press the record high in the first half of the year".

The TWI rose as high as 76.18, the highest since mid-2007 when the Reserve Bank last intervened, though Mr Speizer says that was when fundamentals were turning for the currency and Mr Wheeler would not get the same impact as the last intervention.

Figures published last week showed the Reserve Bank sold a net $199 million of kiwi dollars in December, which has been seen as the RBNZ taking a punt on the currency running out of steam.

The Reserve Bank of Australia will review its target cash rate tomorrow and is expected to cut the benchmark rate a quarter-point to 2.75 percent. The kiwi was unchanged at a six-month high of 81.22 Australian cents at 8am in Wellington from the New York close, and up 80.81 cents at 5pm in New Zealand.

The local currency edged up to 78.45 yen from 78.38 yen on Friday in New York, and was almost unchanged at 61.96 euro cents from 61.97 cents. It edged lower to 53.84 British pence from 53.86 pence last week.

(BusinessDesk)

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7957 -0.0003 -0.04%
AUD 0.9061 -0.0010 -0.11%
EUR 0.6258 0.0034 0.55%
GBP 0.4940 0.0012 0.24%
HKD 6.1724 -0.0034 -0.06%
JPY 85.0910 0.0060 0.01%

Commods

Commodity Price Change Time
Gold Index 1244.2 8.570 2014-10-20T00:
Oil Brent 85.4 1.820 2014-10-20T00:
Oil Nymex 82.8 -0.040 2014-10-20T00:
Silver Index 17.3 0.023 2014-10-20T00:

Indices

Symbol Open High Last %
NZX 50 5233.1 5256.5 5233.1 0.45%
NASDAQ 4359.2 4419.5 4316.1 2.40%
DAX 8693.1 8889.8 8717.8 1.94%
DJI 16406.0 16620.8 16399.7 1.31%
FTSE 6267.1 6372.3 6267.1 1.68%
HKSE 23073.4 23231.5 23070.3 0.08%
NI225 15115.3 15115.3 15111.2 -2.03%