Kiwi rises amid strong US stocks and improved Europe economy

The New Zealand dollar is firm, reflecting indications of improving European economies and the expectation that central banks in New Zealand and the United States will keep policy easy this week.

The kiwi was at 83.73 US cents at 8am, up from 83.61 US cents at 5pm yesterday.

The international backdrop is looking better with the Dow Jones Industrial Average at a five-year high as this market geared up for a new day.

A positive German consumer confidence report added to the upbeat tone, as the rising euro continued to test $US1.35, a key resistance level.

"It's nudging ever closer to that magical $1.35 level and someone is going to break through and it will possibly rise to $1.40," Imre Speizer, senior markets strategist at Westpac, says.

He doubts building permits data due today will be a market mover.

Traders are waiting for a statement by the US Federal Reserve's Open Market Committee at 8.15am NZ time on Thursday, and the cash rate review by the Reserve Bank of New Zealand which will follow it.

Mr Speizer says the RBNZ comments may be more dovish than the last press release in December, which could cause a little kiwi selling.

The FOMC may reaffirm that US stimulatory programmes will be kept in place after mumbles previously of a possible exit.

"I'd expect Bernanke [Fed chairman Ben Bernanke] to say parts of the economy have improved but parts are still a bit questionable. That might cause US interest rates to dip. That's a potential up for the kiwi," he says.

Friday's US payrolls data is a big event for the market but evidence ahead of it has been conflicting.

"It's a crap shoot more than usual," Mr Speizer says.

The kiwi was at 79.99 Australian cents from 80.16 cents at 5pm yesterday and was at 75.94 yen from 76.08.

It was at 62.08 euro cents from 62.16, and at 53.15 British pence from 53.27.

The trade-weighted index was at 75.28 from 75.62.

(BusinessDesk)

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1 Comment & Question

Commenter icon key: Subscriber Verified

What, no mention that the US CB consumer confidence figures dropped to levels last seen at the end of 2011? Huge miss, expected to come in @ 65 and only made 58.

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7791 -0.0042 -0.54%
AUD 0.8851 -0.0022 -0.25%
EUR 0.6215 0.0001 0.02%
GBP 0.4870 -0.0027 -0.55%
HKD 6.0418 -0.0328 -0.54%
JPY 87.2390 1.6720 1.95%

Commods

Commodity Price Change Time
Gold Index 1198.1 -13.300 2014-10-30T00:
Oil Brent 86.2 1.180 2014-10-30T00:
Oil Nymex 81.1 -1.180 2014-10-30T00:
Silver Index 16.4 -0.844 2014-10-30T00:

Indices

Symbol Open High Last %
NZX 50 5370.2 5405.3 5370.2 0.33%
NASDAQ 4639.4 4641.5 4566.1 1.28%
DAX 9283.4 9339.3 9114.8 2.33%
DJI 17208.8 17395.5 17195.4 1.01%
FTSE 6463.6 6553.4 6463.6 1.28%
HKSE 23913.7 24046.4 23702.0 1.25%
NI225 15817.1 16533.9 15658.2 4.83%