NZ dollar rises as slide in commodities ends

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The New Zealand dollar rose against the greenback after the slide in commodity prices ran out of steam and U.S. stocks rose, stoking demand for growth-linked currencies such as the kiwi.
The Thompson Reuters Jefferies CRB Index, a broad measure of 19 commodities, rose 0.1 per cent to 338.56, following a 3 per cent decline the previous day.

The stronger performance on commodity markets stoked investors' appetite for higher yielding, or riskier, assets on Wall Street, with the Standard & Poor's 500 index recently trading 0.4 per cent up at 1,347.52.

"There was some bargain hunting in commodities, which saw prices bounce back up," with the risk-on sentiment helping drive demand for equities, said Tim Kelleher, head of institutional FX sales New Zealand at ASB Institutional.

The kiwi recently traded at 79.47 US cents, up from 78.89 cents yesterday, and rose to 68.79 on the trade-weighted index of major trading partners' currencies from 68.34 yesterday.

It rose to 74.59 Australian cents from 74.18 cents previously, and climbed to 64.28 yen from 63.93 yen. It rose to 55.83 euro cents from 55.48 cents yesterday, and gained to 48.84 pence from 48.28 pence.

Yesterday's weaker jobs numbers continuing to impact the Australian dollar, which was last trading at US$1.0654, down from its mid-week peak of US$1.0888.

Government data showed the number of people employed declined by 22,100, after a revised 43,300 gain in March. That was short of a 17,000 increase forecast by a Bloomberg poll. The jobless rate held at 4.9 per cent.

"The kiwi-Aussie cross rate was the major mover overnight," Kelleher said. "I don't know the last time when Australia had a negative jobs number."

The kiwi dollar may trade between 79.25 US cents and 79.75 cents today, he said, with further consolidation around this level likely to be seen in the near term.