Article – BusinessDesk
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 …
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.