The kiwi rose as high as US$0.6590, and was trading at 0.6582 at 8am in Wellington, from 0.6538 at 5pm yesterday. The trade-weighted index gained to 71.71 from 71.30 yesterday.
Investors are favouring currencies with higher interest rates, such as the New Zealand dollar, where the benchmark is at 2.75%, and the Australian dollar where rates are 2%. That compares with Europe, where the European Central Bank is expected to take interest rates even further into negative territory when it meets this week, and Japan with a benchmark near zero, where Bank of Japan governor Haruhiko Kuroda said yesterday the central bank won’t hesitate to ease monetary policy further to achieve its inflation goal quickly.
The kiwi touched €0.6241, its highest level since June, and was trading at 0.6229 at 8am from 0.6175 yesterday. It touched a month high of 81.25 yen and was trading at 81.04 yen at 8am from 80.23 yen yesterday
“New Zealand dollar was a key beneficiary, along with Australian dollar, of the move higher in high-yielders,” Bank of New Zealand currency strategist Raiko Shareef said in a note. “NZD/USD flirted with another test of the 0.6600 level, but that remains strongly resistant. We still favour selling NZD/USD rallies.”
In NZ today, third-quarter terms of trade data is published at 10:45am and the latest monthly house values for November are released by Quotable Value at midday. Tonight, all eyes will be on the GlobalDairyTrade auction where NZX milk futures are signalling an increase.
The NZ dollar was little changed at A$0.9090 from 0.9094 yesterday ahead of the Reserve Bank of Australia meeting today where no change to policy is expected.
The local currency gained to 4.2112 yuan from 4.1816 yuan yesterday. The International Monetary Fund yesterday announced that China’s currency will join the fund’s group of international reserve currencies which includes the US dollar, the euro, the yen and the British pound.
In China today, two gauges of manufacturing activity are scheduled for release, which will give investors further clues as to how Asia’s largest economy is tracking.
The kiwi touched a month high of £0.4381, and was trading at 0.4371 at 8am from 0.4350 yesterday.
© BusinessDesk.
