The New Zealand dollar rose to a week high against other major currencies overnight as investors felt more buoyant, underpinning stocks and commodity currencies.
The kiwi touched a week high of 83.41 US cents this morning and was trading at 83.38 cents at 8am in Wellington, from 82.77 cents at 5pm yesterday. The trade-weighted index advanced to 78.20 from 77.76 yesterday.
Investor risk appetite improved, pushing the Standard & Poor's 500 to a record high, underpinned by expectations that heavily indebted Ukraine would receive international aid, and as German business confidence climbed to the strongest level in 2 years and Eurozone inflation was revised higher. Improved sentiment bolstered demand for commodity currencies such as the New Zealand and Australian dollars.
"It seems to be a global risk story," said Peter Cavanaugh, client advisor at Bancorp Treasury Services. "The world is less scary. There's been quite a mixed bag of data and events lately but the markets in the last 24 hours have grabbed the good stuff and anything that has been ambivalent like what is happening in the Ukraine is being viewed positively because it is progress."
In New Zealand today, traders are awaiting the Reserve Bank of New Zealand's latest inflation expectations survey, scheduled for release at 3pm, which may show that the two year ahead measure remains above the central bank's 2 per cent midpoint target. The measure was last at 2.34 per cent.
