NZ dollar advances as commodity currencies boosted by oil price gains
The kiwi traded at 67.93USc at 8am in Wellington.
The New Zealand dollar advanced as commodity currencies were bolstered by an increase in oil prices and as the US dollar continued to weaken.
The kiwi traded at 67.93USc at 8am in Wellington from 67.92USc at the New York close, and up from 67.73USc on Friday. The trade-weighted index increased to 71.90 from 71.77 on Friday.
The currencies of commodity-producing countries, such as the kiwi and the Aussie, gained as investor optimism was bolstered by a 6.6% increase in oil prices amid speculation that the Organization of the Petroleum Exporting Countries and other major oil producers may agree to freeze production when they meet in Doha, Qatar on April 17. However, while some countries have tentatively agreed to freeze production, that may be contingent on a similar commitment from Iran which isn't expected to agree.
"Underpinning the outperformance of the 'oil-linked' currencies was a 6.6% jump in the WTI oil price, ahead of the coming weekend's Doha meeting of OPEC and non-OPEC producers," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "However, there is no tangible evidence that a production freeze will be agreed."
A weaker US dollar was also bolstering other currencies against it, Martin said, noting traders were pricing in less than a 50% chance that the Federal Reserve will hike interest rates by the end of the year.
In a speech on Friday night, New York Fed president William Dudley reiterated comments from Federal Reserve chairwoman Janet Yellen that there was "significant uncertainty" about growth prospects abroad, requiring the need for a cautious, gradual approach to rate hikes.
Locally, New Zealand spending on electronic cards for March is scheduled for release today.
The New Zealand dollar edged up to 89.95Ac Australian cents from 89.81Ac cents on Friday, and gained to 4.3902 yuan from 4.3869 yuan. It weakened to 59.47 euro cents from 59.59 cents, slipped to 48.09 British pence from 48.12 pence, and fell to ¥73.28 from ¥73.65.
(BusinessDesk)
Tina Morrison
Mon, 11 Apr 2016
Mon, 11 Apr 2016
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NZ dollar advances as commodity currencies boosted by oil price gains
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