NZ dollar set to pursue recent highs as investors take a shine to kiwi
The New Zealand dollar is set to test its recent highs as a string of upbeat economic data attracts investors looking for growth.
The kiwi was little changed at 84.35 US cents at 5pm in Wellington from 84.37 cents this morning and 84.46 cents on Friday in New York. The trade-weighted index traded at 76.83 at 5pm from 76.83 last week.
The majority of six strategists surveyed by BusinessDesk are picking the kiwi to end the week higher after the local currency rose to a post-float high on a trade-weighted basis last week.
Investors have been attracted by New Zealand's relatively high yield, but are buying into the idea of real growth which could see a hike in interest rates earlier rather than later.
"The world is waking up to the good economic fortunes of New Zealand where they ignored or dismissed it last year," says Imre Speizer, market strategist at Westpac Banking in Auckland. "That could push them into taking a long position in the kiwi."
The major local event this week is a speech by Reserve Bank governor Graeme Wheeler to the New Zealand Exporters' and Manufacturers' Association on Wednesday afternoon. Mr Wheeler has previously said he will talk about the currency impacts facing the export sector.
The kiwi traded at 82 Australian cents from 81.95 cents last week ahead of tomorrow's release of minutes to this month's Reserve Bank of Australia meeting. Investors will be looking for any hint of another rate cut.
New Zealand's currency increased to 54.50 British pence from 54.40 pence last week, and advanced to 63.30 euro cents from 63.19 cents. It gained to 79.38 yen from 79 yen last week.