NZ dollar climbs above 77 US cts, fourth-best performer in 2010
By Paul McBeth
Dec. 31 (BusinessDesk) – The New Zealand dollar climbed above 77 U.S. cents for the first time since November as strong
commodity prices underpinned support for riskier, or higher-yielding, assets, leaving the kiwi poised to be the
fourth-best currency this year.
The kiwi, Australian and Canadian dollars, viewed as commodity currencies, were bolstered by more strength in copper,
aluminium and lead prices as investors look for bigger returns in thin trading during the holiday season. The kiwi’s
6.7% gain is the fourth biggest this year behind the yen, Australian dollar and Swiss franc. The kiwi hit a 31-year high
against the pound, touching 50.09 pence, after analysts were more pessimistic about the outlook for the U.K. economy in
the face of its austerity measures.
“The commodity currencies have had the tail-wind of a weak U.S. dollar and high commodity prices” over the Christmas and
New Year period, said Mike Jones, strategist at Bank of New Zealand. “The moves have been overstated by thin liquidity
trading in the market at the moment, and when people return from holiday, we’ll see the currencies revert back to
fundamentals.”
The kiwi climbed to 77.04 U.S. cents from 76.76 cents yesterday, and rose to 68.95 on the trade-weighted index of major
trading partners’ from 68.75. It advanced to 49.94 pence from 49.48 pence yesterday, and increased 75.82 Australian
cents from 75.41 cents. It was little changed at 57.90 euro cents from 57.98 cents yesterday, and climbed to 62.85 yen
from 62.51 yen.
Jones said the currency may trade between 76.60 U.S. cents and 77.30 cents today.
The commodity currencies pared some of their gains after upbeat American data buoyed the greenback, with jobless claims
falling to a two-year low last week, while house sales rose in November.
(BusinessDesk)