NZ dollar reaches 72 cts as Intel beats estimates

NZ dollar trades above 72 cts as Intel beats estimates, investors stay upbeat

By Paul McBeth

July 14 (BusinessDesk) – The New Zealand dollar touched on 72 U.S. cents for the first time in two months after chip-maker Intel Corp. beat earnings expectations, and kept investors upbeat about the global economy.

Intel posted second-quarter earnings of US$2.9 billion, or 51 cents a share, beating the forecast 43 cents, as stocks on Wall Street extended their gains for a sixth day. Investors’ appetite for riskier, or higher-yielding, assets was stoked by a solid auction for 1.6 billion euros of Greek government bonds, the first since it was bailed out by the its fellow Euro-zone members, which was sold below European Central Bank rates. Traders will be watching local consumer spending and housing data out today, which are both expected to show muted household sentiment in New Zealand.

“We’re seeing some strength in the currency on the back of the Intel result,” said Tim Kelleher, vice president of institutional banking and markets at Commonwealth Bank of Australia. “Expect some soggy data today” which could keep a lid on the kiwi dollar, he said.

The kiwi surged to 72.01 U.S. cents from 71.17 cents yesterday, and gained to 68 on the trade-weighted index of major trading partners’ currencies from 67.66. It rose to 63.56 yen from 62.91 yen yesterday, and increased to 81.60 Australian cents from 81.27 cents. It was little changed from 56.49 euro cents from 56.50 cents yesterday, and advanced to 47.56 pence from 47.09 pence.

Kelleher said the currency may trade between 71.75 U.S. cents and 72.25 cents today, with a key level at 72.10 cents.

“If the kiwi pops on strong retail sales, it’ll go up to about 72.30 cents,” he said.

Investors were initially downbeat going into the London session yesterday amid reports of future policy tightening in China, which put the squeeze on mining stocks in Australia. This wasn’t helped by the downgrade of Portugal’s sovereign credit rating two notches to A1 by Moody’s Investors Service, though the Greek auction helped erode investor pessimism.

The U.S. reported a bigger than expected trade deficit of US$42.3 billion in May, though the increase in imports was taken as resilient consumer and business demand.

(BusinessDesk)

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