New Zealand Dollar Strengthens To 2-day High Against Greenback And Euro
Friday, the New Zealand dollar soared to a 2-day high against its U.S. and European counterparts as a gain in stocks boosted demand for higher-yielding currencies.
The kiwi also showed strength against the yen, while it recovered from a new multi-month low against the Aussie.
Asian markets advanced today on the back of Wall Street’s rally after upbeat economic figures revived confidence about the state of the U.S. economy.
Japan’s Nikkei 225 stock average climbed 0.74%, Hong Kong’s Hang Seng gained 1.7%, South Korea’s Kospi rose 1.3%.
New Zealand’s benchmark NZX-50 index closed up 15.656 points, or 0.45%, at 3160.163.
Markets in Australia, India, Singapore, Taiwan, China and Indonesia also rose.
Asian stocks are sensitive to movements in the U.S., the world’s biggest economy and a key trading partner for the region and often follow big swings on Wall Street.
Thursday’s spark was news from the U.S. government that recently laid off workers seeking jobless benefits fell last week to the lowest level since January, comforting investors ahead of a key monthly jobs report due Friday. Signs U.S. retail sales were on the rise also helped relieve worries about the health of American consumers that have dogged investors in recent months.
Crude prices rose in Asia as the surge in stock markets boosted oil investors’ appetite for risk. Benchmark crude for December delivery was up 47 cents to $80.09 a barrel. The contract fell 78 cents overnight.
Gold rose $2.6, or about 0.3 percent, to $1,091.9 an ounce.
The New Zealand dollar, which closed yesterday’s trading at 0.7218 against the U.S. currency rose to a 2-day high of 0.7256 in early deals on Friday. The next upside target level for the kiwi-greenback pair is seen at 0.731.
During early trading on Friday, the New Zealand dollar climbed to a 2-day high of 2.050 against the euro. This may be compared to Thursday’s close of 2.0616. On the upside, 2.034 is seen as the next target level for the NZ currency.
The New Zealand dollar advanced against the yen in early deals on Friday. At 2:25 am ET, the kiwi-yen pair reached 65.71, up from yesterday’s close of 65.54. If the pair gains further, it may target the 66.5 level.
The Japanese leading index rose to 86.4 in September from 83.2 in August, a preliminary report from Cabinet Office showed today. Theleading index improved for the seventh consecutive month and stood above the expected level of 86.2.
At the same time, the coincident index stood at 92.5, up from 91.2 in August. The reading came in line with economists’ expectations. The preliminary estimate showed that the lagging index climbed 0.3 points to 84.5 in September.
The New Zealand dollar reversed its early Friday Asian session’s loss against the Aussie at the end of the session. The kiwi thus recovered from a new multi-month low of 1.2678 to 1.2621. The next likely target for the kiwi is seen at 1.244, if it climbs further. At yesterday’s close, the aussie-kiwi pair was quoted at 1.2615.
The Australian dollar climbed in early Asian deals today as the Reserve Bank of Australia boosted its forecasts for economic growth for the coming year and indicated more interest rate increases are on the way.
In its quarterly Statement on Monetary Policy, the central bank’s forecast of GDP growth was expanded to 1.75 percent to the end of calendar year 2009, compared to its previous forecast of 0.5 percent growth.
The RBA said it projects growth in 2010 will rise to 2.25 percent for the year to June and 3.25 percent by the end of 2010. The bank’s August forecast predicted a growth rate of 1.0 percent to mid-2010 and 2.25 percent for full 2010.
On the future of interest rates, the RBA strongly hinted that more rate hikes were on the horizon, following increases of 0.25 percent at each of the last two monthly meetings.
Looking ahead, the German factory orders report for September is due at 6:00 am ET.
Across the Atlantic, the U.S. Labor Department is scheduled to release its monthly non-farm payroll report at 8:30 am ET. Economists estimate that the U.S. economy lost 175,000 jobs in October and look for an unemployment rate of 9.9%.
The Commerce Department is due to release its wholesale inventories report at 10 am ET. Economists expect wholesale inventories at the end of September to show a 1% decline.
At 3:00 pm ET, the U.S. Federal Reserve is expected to release its monthly consumer credit report. Consumer credit for September is likely to show a decline of $10.3 billion.
