News Column

NZ Dollar Rises To 3-year High Versus US Dollar

July 9, 2014



CANBERA (Alliance News) - The NZ dollar advanced to a 3-year high against the US dollar in European deals on Wednesday, in response to Fitch Ratings's upgrade of nation's AA sovereign rating outlook from stable to positive.

International credit rating agency Fitch on Tuesday affirmed the New Zealand's AA rating, while revising the outlook on sovereign ratings to positive from stable.

The revision reflected a strengthening the resilience of New Zealand's sovereign credit profile due to fiscal consolidation, the Fitch said, adding that increasing housing prices and dairy prices, as well as the reconstruction efforts in Canterbury are supporting economic growth.

The government's fiscal consolidation drive continues to be strong and Fitch believes it is supported across the political spectrum, it added.

The NZ dollar rose to 0.8816 against the US dollar for the first time since August 2011, and held steady thereafter. This may be compared to an early low of 0.8780.

Against the Australian dollar, the kiwi climbed to a 2-month high of 1.0659, from an early low of 1.0707, and held steady thereafter. The pair was quoted at 1.0691 at yesterday's close.

The Westpac Melbourne Institute Index of Consumer Sentiment showed that Australia's consumer confidence increased in July after a tumble in the previous months but remained weaker than average. The index rose to 1.9% on month to 94.9 in July from 93.2 in June.

The NZ dollar advanced to 1.5446 against the euro, from an early low of 1.5497, and held steady thereafter. The kiwi ended yesterday's deals at 1.5477 against the euro.

Moving away from an early low of 89.17 against the yen, the kiwi rose to 89.58 and held steady thereafter. The kiwi-yen pair was trading at 89.23 yesterday's close.

The Bank of Japan said that the M2 money stock in Japan was up 3.0% on year in June - standing at 875.3 trillion yen. That matched expectations, and it also slowed from 3.3% in May.

Looking ahead, European Central Bank President Mario Draghi will deliver a speech in London at 2:30 pm ET.



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Source: Alliance News


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