NZ dollar rises above 73 US cents, seen as outperformer in face of weak greenback
By Jonathan Underhill
June 27 (BusinessDesk) - The New Zealand dollar rose above 73 US cents and may be a stand-out performer in the face of a
weak greenback on the basis of the nation's relatively high interest rates and sturdy economic growth.
The kiwi was trading at 73.01 US cents as at 5pm in Wellington from 72.83 cents late yesterday. The trade-weighted index
rose to 78.70 from 78.56.
Among recent data that has helped lift sentiment for the kiwi dollar, exports rose to a three-year high in May in the
face of rising dairy prices, while farmer confidence and investment intentions jumped to a record high in the second
quarter, based on a Rabobank survey. The Reserve Bank has signalled no increase in interest rates for the foreseeable
future but that keeps the official cash rate 50 basis points above the Federal Reserve's key rate and a quarter point
above the Reserve Bank of Australia's cash rate.
"The kiwi is going to continue to outperform," said Mitchell McIntyre, a dealer at HiFX. While there is strong
resistance at 73.50 US cents, "given the momentum, I wouldn't be surprised if we had a look at 74" US cents.
He said reports that China plans to curtail its domestic iron ore and coking coal production had given the Aussie dollar
a lift late in the day and the kiwi had risen along with it.
Investors are now looking ahead to Federal Reserve chair Janet Yellen's speech in London on Tuesday, where the topic is
global economic issues and where investors will be listening for any hint of a third US rate hike this year. On
Thursday, the final estimate for US first-quarter gross domestic product is expected to confirm the world's biggest
economy grew 1.2 percent and on Friday, the core PCE for May, Yellen's preferred inflation measure, may print at zero.
The kiwi traded at 96.07 Australian cents from 96.08 cents. The kiwi advanced to 57.35 British pence from 57.14 pence
and rose against a broadly weaker Japanese currency to 81.63 yen from 81.04 yen. It rose to 4.9956 yuan from 4.9782 yuan
and gained to 65.25 euro cents from 65.07 cents.
New Zealand's two-year swap rate was unchanged at 2.21 percent while the 10-year swap rate fell 2 basis points to 3.12
percent.
(BusinessDesk)