New Zealand Dollar Shows Mixed Trading Against Majors
Thursday morning in Asia, the New Zealand dollar showed mixed trading against its major counterparts. While the kiwi gained against the yen, it fell to a 2-day low against the aussie. On the other hand, the kiwi showed choppy trading against the greenback and the euro.
New Zealand share market opened modestly higher today after receiving a mixed lead from Wall Street, where most of the U.S. averages except the Dow closed higher after Federal Reserve announced its decision to hold U.S. interest rates steady.
The benchmark NZX 50 index was up by 11.75 points or 0.09% to 2,751.56 shortly after the market opened for the day, while the broader NZX All Capital index posted a gain of 12.64 points or 0.45% to 2,816.23.
In economic news, New Zealand posted a seasonally adjusted current account deficit of NZ$2.682 billion for the first three months of 2009, a decline of 1.042 billion from Q4 of 20098.
In non-seasonally adjusted terms, the trade deficit was NZ$1.247.
Statistics NZ reported today that the deficit for the 4th quarter of 2008 was upwardly revised to NZ$4.06 billion.
The Q1 deficit was larger than the NZ$1.133 billion deficit forecast by most economists.
The NZ dollar that closed yesterday’s trading at 1.2463 against the Aussie slipped to a 2-day low of 1.2513 in early Asian deals on Thursday. The next downside target level for the kiwi is seen at 1.261.
The Aussie strengthened as Australia’s leading economic index rose for the third straight month in April by 0.7%. The April index reading was 113.5.
The organization said strength in building approvals, money supply and stock prices offset a decline in
rural goods.
The Conference board’s Coincident Index, which measures current economic activity,increased 0.1 percent in April. The board also said new disposable income data led to downward revisions in the Coincident Index for the previous five months. The April Coincident Index reading was 112.3.
During early Asian deals on Thursday, the NZ dollar advanced against the yen. At 9:50 pm ET, the kiwi-yen pair reached 61.68, up from Wednesday’s close of 61.26. The near term resistance level for the pair is seen at 61.9.
The yen declined as a gain in Asian stocks prompted investors to buy higher-yielding assets with money borrowed from Japan.
Against the currencies of U.S. and Europe, the NZ dollar showed choppy trading during early Asian deals on Thursday. The kiwi-greenback pair bounced between 0.6388 and 0.6417 and the euro-kiwi pair moved between 2.1838 and 2.1768. At yesterday’s close, the kiwi was worth 0.6402 against the greenback and 2.1774 against the euro.
As expected, the policy making arm of the Federal Reserve kept its key interest rate steady yesterday, leaving it at a target range between 0 and 0.25 percent.
The statement accompanying the rate decision was almost identical to the April statement in terms of economic outlook, signaling that economic activity, while moderating, will remain weak for some time.
In the European session today, the Italian business confidence for June, trade balance for May and the euro-zone industrial new orders report for April are due for release.
Across the Atlantic, the U.S. Bureau of Economic Analysis is due to release its final first quarter GDP report at 8:30 am ET. The report is likely to show that the U.S. economy contracted at a 5.7% rate in the quarter.
The preliminary estimate showed that the U.S. GDP shrank at a 5.7% rate in the first quarter compared to a 6.3% GDP decline in the previous quarter. The contraction was worse than the 5.5% decline expected by economists, but not as worse as the advance estimate of a 6.1% decline. On a year-over-year basis, the first quarter GDP declined by 2.5% compared to 0.8% decline in the fourth quarter.
At the same time, the Labor Department is due to release its customary weekly jobless claims report for the week ended June 20th.
