NZ dollar gains half a US cent on positive US data; RBNZ review looms

BUSINESSDESK: The New Zealand dollar rose half a US cent as a report showed US companies added more workers last month and as traders await the Reserve Bank’s review of monetary policy.

The New Zealand dollar rose as high as 82.01 US cents from 81.59 cents yesterday at 5pm. It traded at 81.94 cents at 8am.

The kiwi strengthened for the first time in four days as the US, the world’s largest economy, added 216,000 jobs in the private sector in February, according to the National Employment Report. The gain comes ahead of Reserve Bank of New Zealand’s review of interest rates at 9am, at which Governor Alan Bollard is expected to hold the official cash rate at 2.5 percent.

In the December monetary policy statement, the central bank reined in its forecast track for the 90-day bank bill, often seen as a proxy for the OCR, with gradual rises through the second half of the year.

“The RBNZ is not going to change the rates,” said Alex Sinton, senior dealer at ANZ New Zealand. “People may view it as a little bit more hawkish than dovish – hopefully we will see the kiwi go through the 82 cent mark.”

Thursday is a busy day for central bank meetings with the Bank of Canada, Bank of England and European Central Bank all announcing interest rate reviews.

In Europe, Greek bondholders have increased their level of participation for the second bailout package to 58 percent. The Mediterranean government needs a minimum of 75 percent participation by Thursday for the deal to proceed.

The New Zealand dollar rose to 77.41 Australian cents from 77.34 cents at 5pm yesterday after figures yesterday showed Australia’s economy grew at 0.4 percent, half the pace expected in the fourth quarter. The high currency and weak consumer demand offset the positive effects of the resources boom.

In New Zealand, the economic survey of manufacturing for the December quarter is set for release today.

The kiwi rose to 62.37 euro cents from 62.09 cents and advanced to 52.06 British pence from 51.87 pence. It fell to 66.49 yen from 65.93 yen.

The trade-weighted index increased to 72.81 from 72.50.