The ‘Kiwi’ continues to climb, boosted by several pieces of economic news.
The New Zealand Dollar exchange rate was trading in the region of 0.5505 against the British Pound as of 09:30 am
Gains recorded by the New Zealand Dollar were extended during local trading as the currency was bolstered by several pieces of positive South-Pacific news.
In the most recent online auction the price of dairy produce, a key export for New Zealand, was bumped up by 10 % as a result of drought in the nation. The odds of local dairy prices advancing further also increased after the majority of New Zealand’s North Island was designated a drought-zone by the Government.
The Fonterra Cooperative Group consequently slashed its estimate for milk collection to 1 per cent growth for the season.
But dairy wasn’t the only factor behind the ‘Kiwi’s gains.
As Auckland-based market strategist Imre Speizer comments; ‘We were swamped by other good news – it’s hard to say how much impact dairy had, though such a big jump did show some reaction [in the ‘Kiwi’]. People have forgotten about Italy and [the US] sequester for now’.
The other good news included a report showing a 1.8 per cent increase in the volume of building activity in the fourth quarter. Although growth in the third quarter of 2012 was more rapid, the report indicated relatively constant activity around the country.
Economic growth in Australia, one of New Zealand’s main trading partners was also shown to be stronger-than-forecast, with expansion in the fourth quarter coming in at 0.6 per cent and expansion in the third-quarter being upwardly revised to 0.7 per cent from an initial 0.5 per cent.
The New Zealand Dollar was additionally boosted by the Dow Jones Industrial Average (the average of 30 large, industrial stocks) closing at a record high.
House Price data for New Zealand, due for release at 23:00 pm GMT, could inspire additional ‘Kiwi’ movement, but investors will largely be focusing on economic news out of the US and Eurozone.
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