NZ dollar picks up ground
The New Zealand dollar surged overnight Friday as investors felt more comfortable buying riskier assets after stocks came off lows and commodities jumped sharply.
The New Zealand dollar surged overnight Friday as investors felt more comfortable buying riskier assets after stocks came off lows and commodities jumped sharply.
US stocks staged a comeback on Friday afternoon (local time), while oil prices shot higher, fuelling risk appetite and prompting buying in the euro and the Australian, Canadian and NZ dollars -- four currencies that have become symbols of risk appetite in the developed world, moving in tandem with US stocks.
The NZ dollar moved from below US70c around 10pm Friday to peak around US71.55c around 6am Saturday. By 8am today it had eased just slightly to US71.41c.
The kiwi made a similar push against the European and Japanese currencies, and by 8am today was at 0.5772 euro and 63.75 yen from 0.5715 euro and 63 yen at 5pm on Friday.
Against the Australian dollar, the kiwi was little changed from Friday's local close at A81.75c by 8am today, while the trade weighted index rose to 68.34 at 8am today from 67.77 at 5pm on Friday.
BNZ strategist Mike Jones said the NZ dollar had now recovered nearly all its losses of late May, although global sentiment was still fragile despite concerns about contagion from Europe's debt woes having abated somewhat.
Domestic fundamentals had contributed relatively more to the NZ dollar's recent recovery than had the mild improvement in the global backdrop, he said.
Meanwhile, traders were not expecting any surprises from a weekend meeting of the Group of 20 rich and developing nations.
"On the G20, I don't expect too much, because the big announcement already happened last week with China saying it would let its currency strengthen a bit," said John Doyle, senior currency strategist at Tempus Consulting in Washington.
NZPA
Mon, 28 Jun 2010
Mon, 28 Jun 2010
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NZ dollar picks up ground
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