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NZ dollar eases after strong start to 2011

The New Zealand dollar retreated further from a five-week high against the United States currency, which was boosted by unexpectedly strong US factory numbers, while commodity prices weakened.

NZPA
Wed, 05 Jan 2011

The New Zealand dollar retreated further from a five-week high against the United States currency, which was boosted by unexpectedly strong US factory numbers, while commodity prices weakened.

The Australian dollar also fell against the greenback, retreating from a 28-year peak around $US1.0257 set early on Saturday to $US1.0057c at 8am today, as severe floods in Queensland were expected to affect coal production.

Traders said funds sold aussie for euros, taking profit on long aussie positions taken in the run-up to the end of 2010.

The NZ dollar was down to US76.77c at 8am, having peaked around US78.10c early on Saturday.

Against the aussie the kiwi was trading in a narrow range above A75.90c after peaking around A76.50c early on Saturday. At 8am today the kiwi was at A76.32c.

BNZ currency strategist Mike Jones said the NZ dollar had been the strongest performing currency since Christmas Eve, largely reflecting a surge in commodity prices since then. The rise over the holiday period had seen the kiwi top 50p against the British currency for the first time since June 1979.

"It's worth noting, part of the NZD's strength over the holiday period likely reflects year-end positioning and whippy holiday-thinned markets," Mr Jones said.

Early on Monday, the NZ dollar also reached a 3-1/2-year peak against the European currency around 0.5850 euro, then fell away to be at 0.5764 at 8am today.

Early yesterday, the NZ dollar reached 63.43 yen, its highest level in almost a month, and had eased to 62.88 yen by 8am today, when the trade weighted index was 68.81.

Overnight, data showed new orders received by US factories rose in November and orders excluding transportation recorded their largest gain in eight months, fuelling US dollar buying versus the euro.

Weakness in commodities also undermined the euro, which in recent months has moved in tandem with the sector as global risk appetite improved.

Despite the increase in risk appetite, volatility in major currencies is still elevated, suggesting investors in the options market remained nervous about global growth prospects.
The New Zealand dollar retreated further from a five-week high against the United States currency, which was boosted by unexpectedly strong US factory numbers, while commodity prices weakened.

The Australian dollar also fell against the greenback, retreating from a 28-year peak around $US1.0257 set early on Saturday to $US1.0057c at 8am today, as severe floods in Queensland were expected to affect coal production.

Traders said funds sold aussie for euros, taking profit on long aussie positions taken in the run-up to the end of 2010.

The NZ dollar was down to US76.77c at 8am, having peaked around US78.10c early on Saturday.

Against the aussie the kiwi was trading in a narrow range above A75.90c after peaking around A76.50c early on Saturday. At 8am today the kiwi was at A76.32c.

BNZ currency strategist Mike Jones said the NZ dollar had been the strongest performing currency since Christmas Eve, largely reflecting a surge in commodity prices since then. The rise over the holiday period had seen the kiwi top 50p against the British currency for the first time since June 1979.

"It's worth noting, part of the NZD's strength over the holiday period likely reflects year-end positioning and whippy holiday-thinned markets," Mr Jones said.

Early on Monday, the NZ dollar also reached a 3-1/2-year peak against the European currency around 0.5850 euro, then fell away to be at 0.5764 at 8am today.

Early yesterday, the NZ dollar reached 63.43 yen, its highest level in almost a month, and had eased to 62.88 yen by 8am today, when the trade weighted index was 68.81.

Overnight, data showed new orders received by US factories rose in November and orders excluding transportation recorded their largest gain in eight months, fuelling US dollar buying versus the euro.

Weakness in commodities also undermined the euro, which in recent months has moved in tandem with the sector as global risk appetite improved.

Despite the increase in risk appetite, volatility in major currencies is still elevated, suggesting investors in the options market remained nervous about global growth prospects.
The New Zealand dollar retreated further from a five-week high against the United States currency, which was boosted by unexpectedly strong US factory numbers, while commodity prices weakened.

The Australian dollar also fell against the greenback, retreating from a 28-year peak around $US1.0257 set early on Saturday to $US1.0057c at 8am today, as severe floods in Queensland were expected to affect coal production.

Traders said funds sold aussie for euros, taking profit on long aussie positions taken in the run-up to the end of 2010.

The NZ dollar was down to US76.77c at 8am, having peaked around US78.10c early on Saturday.

Against the aussie the kiwi was trading in a narrow range above A75.90c after peaking around A76.50c early on Saturday. At 8am today the kiwi was at A76.32c.

BNZ currency strategist Mike Jones said the NZ dollar had been the strongest performing currency since Christmas Eve, largely reflecting a surge in commodity prices since then. The rise over the holiday period had seen the kiwi top 50p against the British currency for the first time since June 1979.

"It's worth noting, part of the NZD's strength over the holiday period likely reflects year-end positioning and whippy holiday-thinned markets," Mr Jones said.

Early on Monday, the NZ dollar also reached a 3-1/2-year peak against the European currency around 0.5850 euro, then fell away to be at 0.5764 at 8am today.

Early yesterday, the NZ dollar reached 63.43 yen, its highest level in almost a month, and had eased to 62.88 yen by 8am today, when the trade weighted index was 68.81.

Overnight, data showed new orders received by US factories rose in November and orders excluding transportation recorded their largest gain in eight months, fuelling US dollar buying versus the euro.

Weakness in commodities also undermined the euro, which in recent months has moved in tandem with the sector as global risk appetite improved.

Despite the increase in risk appetite, volatility in major currencies is still elevated, suggesting investors in the options market remained nervous about global growth prospects.

NZPA
Wed, 05 Jan 2011
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NZ dollar eases after strong start to 2011
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