The New Zealand dollar rose to a two-month high against the greenback after figures showed US manufacturing growth stoked equities and helped boost investors’ appetite for risk.
The New Zealand dollar traded at 78.9 US cents just after 8am this morning, up from 78.20 US cents late yesterday and from 77.25 US cents on Dec. 30, before the New Year public holiday. The trade-weighted index rose to 69.99 from 69.71.
US manufacturing had its best month since June, based on the Institute for Supply Management’s factory index, which rose to 53.9 in December from 52.7 in November, while a report showed construction spending in the US rose in November for a third time in four months.
The US data follows on from solid manufacturing activity in China and a better-than-expected jobless report from Germany.
“The New Zealand and Australian dollar climbed because risk appetite has been put on,” said Stuart Ive, senior trader at HiFX. “There has been a surge in the stock market – risk is back.”
The kiwi extended its gains after prices of dairy products fell 0.7 percent in the first sale of Fonterra Cooperative Group’s GlobalDairyTrade platform for 2012, which was released this morning.
The decline was paced by whole and skim milk powder.
Commodity prices fell through much of 2011 as investors fretted the impact of Europe’s debt crisis could have in slowing global growth. The region is expected to sink into recession this year as leaders argue about the response to the crisis.
There is no significant New Zealand data set for release this week. In the US, non-farm payrolls and employment rate will be released on Friday.
The kiwi dollar was recently at 60.4 euro cents from 60.29 cents yesterday. It rose to 60.48 yen from 60.15 yen and 50.4 British pence, from 50.39 pence. It was little changed at 76.08 Australian cents from 76.07 cents.
(BusinessDesk)
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