NZ Dollar Rises To 3-day High Against Euro
The New Zealand dollar rallied against major currencies on Friday morning in Asia as a surge in regional shares increased demand for higher-yielding assets. The kiwi climbed to a 3-day high against the euro.
The New Zealand share market opened marginally higher today, following a positive overnight lead from Wall Street, where U.S. stocks moved higher in a cautiously traded session in advance of Friday’s important report on unemployment. At 10:25 pm ET, the benchmark NZX 50 index rose by 19 points or 0.61% to 3,110 while the broader NZX All Capital index added 22 points or 0.69% to 3,149.
Among other markets in the Asia-Pacific region, Australia and Singapore are trading modestly higher, while Korea is exhibiting weakness. The Japanese market opened higher today on the back of a positive close on Wall Street overnight, but has subsequently slipped into the red.
Hovering near yesterday’s 2-day high, the New Zealand dollar advanced to 63.12 against the Japanese yen by 10:00 pm ET. This may be compared to Thursday’s New York session closing value of 62.82. The kiwi-yen pair is presently worth 63.0 with 63.5 seen as the next target level.
Capital spending in Japan was down 21.7 percent on year in the second quarter of 2009, the Ministry of Finance said today – beating forecasts for a 23.0 percent annual contraction following the 25.3 percent fall in the first quarter.
Excluding software, capex was down 22.2 percent on year – again beating expectations for a 27.5 percent annual decline after the 25.4 percent contraction in the previous three months.
The New Zealand dollar that closed yesterday’s deals at 1.2412 against the Australian dollar drifted higher to 1.2354 by 10:00 pm ET. The aussie-kiwi pair is presently quoted at 1.2363.
The New Zealand dollar advanced to 0.6811 against the US dollar by 10:00 pm ET, compared to 0.6779 hit late New York Thursday. In near-term, resistance is seen around the 0.686 level for the kiwi. Currently, the kiwi-buck pair is quoted at 0.68.
The greenback gained yesterday after the Labor Department report showed that jobless claims edged down to 570,000 in the week ended August 29th from the previous week’s revised figure of 574,000. Economists expected jobless claims to slip to 564,000 from the 570,000 originally reported for the previous week.
Also, the Institute for Supply Management said its index of activity in the service sector rose to 48.4 in August from 46.4 in July. Economists had been expecting a slightly lower reading of 48.0.
The New Zealand dollar that closed Thursday’s North American deals at 2.1046 against the European currency climbed around 0.50 percent to touch a 3-day high of 2.0943 by 10:00 pm ET. The euro-kiwi pair is presently worth 2.0975 with 2.087 seen as the next target level.
From the euro-area, Italian trade balance data is due out at 4:00 am ET. Also, the European commission will release its economic forecasts at 5:45 am ET.
Turning to the U.S., the markets will focus on the key monthly employment report from the Labor Department. The report, which is scheduled at 8:30 am ET, is expected to show that employment fell by 225,000 jobs in August after the loss of 247,000 jobs in July. Meanwhile, the unemployment rate is expected to tick up to 9.5 percent after slipping to 9.4 percent in the previous month.
