The New Zealand dollar gained as investors were more upbeat after better-than-expected second-quarter earnings from investment bank JPMorgan & Chase, stoking appetite for higher-yielding assets.
The New Zealand dollar rose to 79.67 US cents just before 8am up from 79.51 cents at the close of trading in New York. The kiwi rose as high as 65.11 euro cents, the highest the single currency has traded since it entered circulation in 2002, trading at 64.96 cents at 8am up from 64.87 cents.
JPMorgan led stocks on Wall Street higher, rising 6 per cent to US$36.07 after the investment bank reported net income of almost US$5 billion in the three months ended June 30, even as its chief investment office posted trading losses of US$5.8 billion.
The Standard & Poor's 500 rose 1.7 per cent to 1356.78, while the Dow Jones Industrial gained 1.6 per cent to 12,777.09, as the bank's result bolstered investors' appetite for higher-yielding assets. The Thomson Reuters/Jefferies CRB Index, which measures the price of 19 raw materials, rose 1.3 per cent.
"Financial markets ended the week on a high," said Mike Jones, market strategist at Bank of New Zealand. "Indicators of risk aversion eased, commodity prices rallied, and bond yields inched off their lows," lifting demand for assets including the kiwi dollar, he said.
