NZ dollar rises against greenback on stronger commodities

NZ dollar rises against greenback on stronger commodity prices, current account looms

By Jason Krupp

March 23 (BusinessDesk) - The New Zealand dollar rose against the greenback on rising commodity prices as receding fears around Japan's nuclear crisis saw a marked increase in investor risk appetite. That comes ahead of the release of fourth-quarter current account data.

The kiwi dollar has gained more than a cent in the past two days as equity markets in Asia returned to normalised trading. Japan’s Nikkei 225 index rose 4.4% to 9,608.32 and Hong Kong’s Hang Seng index gained 0.8% to 22,857.9. That saw commodity prices track higher, which increased demand for growth-linked currencies such as the New Zealand and Australian dollars. The Thompson/Reuters Jefferies CRB index, a broad measure of 19 commodities, rose 0.9% 356.45.

"We're seeing the kiwi trading back around the level it was at before the Japan crisis," said Mike Jones, a markets strategist at Bank of New Zealand. "Overnight the catalyst was global commodity prices, with oil once again leading the charge, but there was a broad based rise in prices overall."

The kiwi rose to 74.10 U.S. cents from 73.93 cents yesterday, and gained to 64.85 on the trade-weighted index of major trading partners’ currencies from 64.75. It fell to 73.28 Australian cents from 73.31 cents yesterday, and rose to 59.97 yen from 59.79 yen. It climbed to 52.14 euro cents from 51.97 cents yesterday, and fell to 45.23 pence from 454.36 pence previously.

Statistics New Zealand is set to release the current account data for the fourth quarter of last year today. The trade deficit is expected to narrow to 2.4% of gross domestic product from 3.1% in the previous quarter, according to Reuters survey.

"The marker will keep an eye on it, particularly as our external accounts are starting to look pretty good, but the currency should take it in its stride unless we get something outside of expectations," said Jones.

He said the currency may trade between a range of 73.70 U.S. cents and 74.60 cents.

(BusinessDesk)

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