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NZ Dollar Rises Causing Dilemma For Commentators

Fuseworks Media
Fuseworks Media

Wellington, April 6 NZPA - The New Zealand dollar rose to its highest level since early this year as investors became more comfortable with the global economic outlook.

By 5pm today the NZ dollar was buying US59.40c from US58.56c on Friday.

BNZ Capital currency strategist Danica Hampton said much of the recent strength in the NZ dollar was attributable to an improvement in sentiment toward the global economy.

An improving global outlook and strong gains across equities had seen growth-sensitive currencies such as the kiwi climb against "safe haven" currencies such as the US dollar.

But commentators are torn. Westpac said the strength in the NZ dollar means either the currency bottomed out in mid-March around US49c, or it is having a multi-week rally in a bear market before falling back.

"There's a tension emerging in the markets, between newly feisty flows and still frail fundamentals," BNZ said.

Tomorrow's NZIER Quarterly Survey of Business Opinion is expected to provide some domestic information about the economy to trade on.

The NZ dollar surged through resistance at 57 yen and is now headed for 61.50, Westpac said. It was around 59.90 yen at 5pm from 58.36 on Friday.

The NZ dollar rose to 0.4380 euro from 0.4355 at 5pm on Friday.

Against the Australian dollar, the kiwi was A82.65c, while the trade weighted index rose to 58.78 from 58.10 on Friday.

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