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NZ Dollar Rises As Risk Appetite Returns

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Nov 24 NZPA - The New Zealand dollar strengthened overnight as the greenback declined broadly.

The kiwi started rising around noon yesterday when it dipped briefly to US72c, and by 8am was at US73.29c.

Weakness in the US currency came after a Federal Reserve official affirmed expectations that interest rates would stay low for some time and strong US housing data dampened the currency's safe-haven appeal.

An industry report showing that US existing home sales jumped to a more than 2-1/2-year high in October further spurred the appetite for risk and boosted higher-yielding currencies such as the Australian and NZ dollars.

At 8am the kiwi was up to 0.4895 euro and 65.30 yen, from 0.4863 euro and 64.60 yen at 5pm yesterday.

Against the Australian dollar, the kiwi lifted to A79.32c from A79c, while the trade weighted index moved up to 65.26 at 8am from 64.82 at 5pm.

BNZ Capital senior strategist Danica Hampton said investor sentiment had made a swift about-turn during the past 24 hours.

The stronger than expected US home sales figures were among upbeat global data that helped ease some concerns about the global outlook.

Equity markets rebounded and commodity prices were dragged higher by a surge in gold, she said.

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