NZ dollar climbs to four-week high amid upbeat markets

NZ dollar climbs to four-week high amid upbeat markets, thin trading

By Paul McBeth

Dec. 30 (BusinessDesk) – The New Zealand dollar climbed to a four-week high against the greenback as upbeat financial markets encouraged investors to seek out riskier, or higher-yielding, assets amid thin trading volumes.

The Standard & Poor’s 500 Index rose 0.3% as traders look to end the year on an optimistic note, and major funds square up their positions ahead of the quarter-end. Light trading volumes accentuated gains for high-yielding assets as buyers were forced to accept the limited range of prices on offer. The Dollar Index dropped 0.6% to 79.76 after the yield on U.S. Treasuries fell amid strong demand for an auction of seven-year notes.

“Things were a little bit jumpy – there wasn’t much trading and not a lot of volume out there,” said Alex Sinton, senior dealer at ANZ New Zealand. The kiwi “led the way – a few people were short from yesterday’s trading and had to cover things,” helping bolster demand for the currency, he said.

The kiwi climbed to 76.51 U.S. cents from 75.93 cents yesterday, and rose to 68.58 on the trade-weighted index of major trading partners’ currencies from 68.37. It was little changed at 62.48 yen from 62.43 yen yesterday, and increased to 75.22 Australian cents from 75.02 cents. It was little changed at 57.86 euro cents from 57.88 cents yesterday, and held at 49.36 pence from 49.30 pence.

Sinton said the currency may trade between 76 U.S. cents 76.80 cents today.

The yen strengthened 0.7% to 81.63 per U.S. dollar after Japan’s Finance Minister Yoshihiko Noda said the world’s third biggest economy will take “bold” action to prevent an over-valued currency.

Portugal, one of Europe’s heavily indebted nations dubbed the PIIGS (Portugal, Ireland, Italy, Greece and Spain), plans to sell 20 billion euros next year to plug the region’s fourth-largest budget deficit. The nation is already taking austerity measures by slashing public sector wages and raising taxes and had its credit rating cut by Fitch Ratings and put on notice by Moody’s Investors Service.

(BusinessDesk)

© Scoop Media