NZ dollar gains as commodities rally
The local currency rose to 71.36USc at 8am in Wellington from 71.11USc yesterday. With special feature audio.
The New Zealand dollar joined other commodity-linked currencies in rising on speculation oil producers will limit global supply.
The local currency rose to 71.36USc at 8am in Wellington from 71.11USc yesterday. The trade-weighted index advanced to 75.86 from 75.61 yesterday.
The price for Brent crude oil rose on speculation members of the Organisation of the Petroleum Exporting Countries would consider joint action to reduce production if prices continue to slide. The Thomson Reuters/CoreCommodity CRB index, a broad measure of prices for raw materials, rose 0.5%, helping spur demand for commodity-sensitive currencies such as the kiwi and Australian dollar.
"Oil prices gained 3% after the Opec President said that an informal meeting between Opec will occur during next month's International Energy Forum meeting and that the current lull in prices is 'only temporary,'" ANZ Bank New Zealand senior rates strategist David Croy said in a note.
The kiwi's rally comes ahead of Thursday's Reserve Bank policy review, where governor Graeme Wheeler is expected to cut the official cash rate at least a quarter-point to 2% and lower the projected track for future rates in a bid to drag down the kiwi dollar and reduce the deflationary impact of cheap imports.
Mr Croy said the Reserve Bank may be able to cap the New Zealand dollar if it's prepared to show a lower track for the OCR "but with so much easing already priced in, and growth accelerating, we struggle to be outright bearish."
Government data today will show consumer spending on credit and debit cards in July.
The local currency climbed to 4.7517 Chinese yuan from 4.7365 yuan yesterday after figures showed China's imports fell 12.5% in July from a year earlier. The kiwi edged down to 93.26Ac from 93.42Ac and rose to ¥73.08 from ¥72.55.
It gained to 54.71 British pence from 54.35 pence yesterday and increased to 64.39 euro cents from 64.06 cents.
(BusinessDesk)
Paul McBeth
Tue, 09 Aug 2016
Tue, 09 Aug 2016
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NZ dollar gains as commodities rally
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