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New Zealand Dollar Rallies Again

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 8 NZPA - The New Zealand dollar today drifted off a four-month high it reached overnight on a combination of positive factors then rallied again on the close.

The NZ dollar rose to US59.91c in overnight trading, its highest since January 7. In its domestic session today it reached US59.36c by late morning, drifted off, then returned to US59.36c at 5pm in a late rally. This was up from US58.85c at the same time yesterday.

BNZ Capital currency strategist Danica Hampton said a combination of factors contributed to the rises.

These included an ongoing positive reaction to better-than-expected unemployment data yesterday in both New Zealand and Australia.

Also, there were no "nasties" in the results of stress tests on US banks.

Markets are waiting for a US jobs report tonight and other key data next week. Retail sales data is the biggest item on the local agenda next week.

ANZ bank said today that a test and break of the US60c level was a matter of time, in an environment where little demand for the US dollar meant that by default the NZ dollar rose.

"Whether local fundamentals warrant such a rise can be debated with the benefit of hindsight," ANZ said.

There was a lot of activity on the Australian cross, which ended the domestic session at A78.70c from A78.10c yesterday.

The NZ dollar also strengthened against the Japanese currency, rising to 58.88 yen from 57.87, but was little changed against the European currency, buying 0.4435 euro.

The trade weighted index was 58.20 from 57.66.

NZPA WGT pjg nb

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