Commodities drive rise in dollar

  • 14/03/2016
Commodities drive rise in dollar

By Tina Morrison

The New Zealand dollar advanced as currencies linked to commodities came back into favour.

The kiwi was at 67.16 US cents at 8am in Wellington, from 67.38 cents at the New York close and 66.91 cents at 5pm on Friday. The trade-weighed index increased to 71.77 from 71.59 on Friday.

Investors favoured currencies of commodity producing countries such as Australia, New Zealand and Canada as their appetite for higher risk assets linked to global growth improved.

The International Energy Agency, which coordinates energy policies of industrialised nations, said on Friday that oil prices might have bottomed.

The CRB Index, which measures a basket of 19 global commodities, touched its highest since early January.

"Commodity-linked currencies led gains against the US dollar," BNZ's said Kymberly Martin.

"Sentiment in markets generally improved. Our global risk appetite index pushed above 40 per cent for the first time this year."

Still, Ms Martin said sentiment toward Australasian currencies may be a bit less warm on Monday after the release of weaker Chinese industrial production and retail sales data at the weekend.

China, the largest export market for Australia and New Zealand, reported industrial production rose 5.4 per cent in February, the weakest growth rate since the global financial crisis, while retail sales increased 10.2 per cent, lagging behind expectations.

Fixed asset investment, a proxy for infrastructure and property spending, grew by 10.2 per cent, though it was largely driven by the public sector.

In New Zealand, the BNZ-BusinessNZ Performance of Services Index is published.

The New Zealand dollar slipped to 88.99 Australian cents from 89.31 cents on Friday, and edged lower to 46.71 British pence from 46.87 pence. It advanced to 60.24 euro cents from 59.91 cents, increased to 76.49 yen from 75.92 yen, and gained to 4.3614 yuan from 4.3419 yuan.

NZN

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