Jan. 10 (BusinessDesk) – The New Zealand dollar rose above 84 cents for the first time since Dec. 19 as US stocks advanced on optimism earnings season will provide evidence the world’s biggest economy is reviving.
The New Zealand dollar traded at 83.82 US cents from 83.81 cents at 5pm in Wellington yesterday, having earlier climbed as high as 84.09 cents. The trade-weighted index rose to 75.54 from 75.44.
Equities in the US and Europe rose after Alcoa's better-than-expected fourth-quarter revenue helped bolster optimism that US corporate results might beat expectations. The company also predicted worldwide demand for aluminum will rise 7 percent in 2013. The Dow Jones Industrial Average climbed 0.3 percent. Mike Jones, strategist at Bank of New Zealand, said demand for New Zealand bonds is also underpinning the kiwi.
“A combination of perky global equity markets and offshore demand for NZ bonds has seen the NZD outperform over the past 24 hours,” Jones said. “However, the NZD/USD was unable to sustain a foothold above 0.8400, thanks to the headwinds from a stronger USD.”
New Zealand 10-year bonds are yielding about 3.55 percent, or about 170 basis points more than comparable 10-year US Treasuries.
Traders will be looking ahead to merchandise trade figures for November, expected to show the deficit narrowed to $620 million in the month from $718 million, for an annual gap of $1.34 billion.
The kiwi dollar rose to 52.31 British pence from 52.22 pence and gained to 64.21 euro cents from 64.08 cents. It traded at 79.78 Australian cents from 79.85 cents and rose to 73.53 yen from 73.28 yen.