Article – BusinessDesk

Jan. 27 (BusinessDesk) – The New Zealand dollar held near a fresh three-month high in local trading against the greenback after data showed the nation unexpectedly posted its first trade surplus in five months and Reserve Bank Governor Alan Bollard …

NZ dollar holds near 3mth high on trade surplus; Bollard’s optimism

By Hannah Lynch

Jan. 27 (BusinessDesk) – The New Zealand dollar held near a fresh three-month high in local trading against the greenback after data showed the nation unexpectedly posted its first trade surplus in five months and Reserve Bank Governor Alan Bollard said the economy could weather a global slowdown.

The New Zealand dollar nudged upwards to 82.11 US at 5pm from 81.89 cents just after 8.30am, having climbed as high as 82.35 cents at about 4am.

New Zealand reported a trade surplus in December as exports of milk powder, butter and cheese reached records. The trade balance was a surplus of $338 million last month, Statistics New Zealand said. This compared to a medium forecast of a $100 million deficit in a survey by Retuers. Exports to Australia increased 30 percent, but imports from the US decreased 39 percent, mainly due to the importing of a large aircraft in December a year earlier.

“Domestic data is not doing what exporters and importers would like it to do,” said Alex Hill, senior currency strategist at HiFX. “We’re really at the mercy of offshore sentiment – unless we see some poor news from Europe we will see higher levels for the kiwi from here.”

The New Zealand dollar held a five-day advance against all its major peers after a speech by Bollard said future monetary policy decisions will have to account for any increase in retail interest rates and the looming construction boom in Christchurch.

Speaking at the Canterbury Employers’ Chamber of Commerce, he said Europe’s sovereign debt crisis is increasing international bank funding costs, which will probably lead to higher retail interest rates locally. Economists aren’t picking the central bank to start hiking interest rates until late this year or early 2013.

The National Business Review reported this afternoon that Bollard plans to step down when his term ends in September and an announcement will be made in coming days. The reports have been shown to have no effect on the New Zealand dollar.

The New Zealand dollar advanced to 62.68 euro cents from 62.48 cents yesterday and 52.39 British pence from 52.18 pence. It increased to 77.36 Australian cents from 77.08 cents yesterday and fell to 63.33 yen from 63.41 yen.

The trade-weighted index gained to 72.45 from 72.23 yesterday.

(BusinessDesk)

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