Article – BusinessDesk
Feb. 29 (BusinessDesk) – The New Zealand dollar gained in local trading after upbeat building and business confidence data stoked investors’ appetite for the currency, and ahead of the European Central Bank’s financing programme for the region’s …
NZ dollar gains after upbeat business confidence, building data; ECB funding looms
By Paul McBeth
Feb. 29 (BusinessDesk) – The New Zealand dollar gained in local trading after upbeat building and business confidence data stoked investors’ appetite for the currency, and ahead of the European Central Bank’s financing programme for the region’s lenders.
The kiwi rose to 84.17 US cents at 5pm from 83.49 cents at 8am, and was up from 83.96 cents yesterday. The trade-weighted index was little changed at 73.78 from 73.73.
New Zealand government figures showed an 8.3 percent increase in the issuance of new building consents last month, primarily on the back of retirement villages in Canterbury, while the National Bank Business Outlook showed firms were regaining confidence after a tepid end to 2011.
That helped stoke investors’ optimism about New Zealand in the lead-up to the ECB’s long-term refinancing operation (LTRO) which will see the central bank lend cheap money to financial institutions to help shore up the region’s stability. Lenders may ask for as much as 470 billion euros at the tender, according to a Bloomberg survey of economists.
“The interpretation by the market will be interesting too – it’s not just simply going to be a big number is good for good for the currency,” said Imre Speizer, market strategist at Westpac Banking. “Right now it’s positive for the kiwi and Aussie, barring a negative surprise,” he said, referring to the trans-Tasman currencies colloquially.
Traders will also be watching United States Federal Reserve chairman Ben Bernanke’s testimony in Washington, where he will update legislators on his view of monetary policy in the world’s biggest economy.
Currencies may get pushed around by end of month positioning as major funds square up their transactions and reassess their strategies for the next period.
The New Zealand dollar was little changed at 62.44 euro cents at 5pm from 62.50 cents yesterday, and slipped to 52.82 pence from 52.99 pence. It declined to 77.85 Australian cents from 77.98 cents yesterday, and gained to 67.71 yen from 67.30 yen.