NZ dollar rises as commodity currencies buoyed by oil price gain

The New Zealand dollar gained as an increase in oil prices lifted commodity linked currencies.

The kiwi rose to 66.33 US cents at 8am in Wellington, from 65.58 cents at 5pm yesterday. The trade-weighted index advanced to 72.10 from 71.47 yesterday.

The CRB Index, which measures a basket of 19 global commodities, touched its highest in almost two weeks after oil prices jumped. Optimism about the outlook for oil lifted after Iran Oil Minister Bijan Namdar Zanganeh said the country backs any measures to stabilise the market including an agreement to cap supply between Saudi Arabia and Russia, the two largest crude producers. Zanganeh didn't say whether Iran would curb its own production. The prospect of a pick up in oil and upbeat US economic data boosted demand for growth-linked currencies such as the kiwi.

"Commodity-linked currencies have enjoyed a rebound while the 'safe haven' Swiss franc and Japanese yen have underperformed," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "This includes strong performance from the Canadian dollar, Norwegian krone, Australian dollar, New Zealand dollar and Russian ruble."

In New Zealand today, the ANZ-Roy Morgan consumer confidence survey is scheduled for release. In Australia, January employment data is due.

BNZ's Martin said little reaction is expected from the release of the European Central Bank's minutes to its last meeting given ECB president Mario Draghi has shared his views since then.

Minutes to the last Federal Reserve meeting released this morning showed policymakers considered altering their view for the US interest rate outlook, but agreed it would be premature, saying they would closely monitor global economic developments as well as oil and stock prices.

The New Zealand dollar was little changed at 92.42 Australian cents from 92.39 cents yesterday. It advanced to 59.52 euro cents from 58.77 cents, increased to 46.39 British pence from 45.85 pence, rose to 75.65 yen from 74.56 yen, and gained to 4.3287 yuan from 4.2790 yuan.

(BusinessDesk)