NZ dollar breaks above 76 US cents

File photo

The New Zealand dollar broke above the 76 US cents level, it highest level since February 11, as upbeat job numbers in the U.S. spurred the rally in global equity markets.

The Standard & Poor's 500 index rose 0.7 per cent to 1,329.27, extending the benchmark's biggest first-quarter rally in 13 years, after a report by ADP Employer Services showed US companies hired 201,000 workers in March.

That marks the third time in four months the world's biggest economy has added more than 200,000 jobs. The upbeat sentiment saw investors' appetite for riskier, or higher yielding, assets continue to climb, and underpinned demand for growth-sensitive currencies such as the kiwi dollar.

"The currency is not backing off in the slightest," said Tim Kelleher, head of institutional FX sales New Zealand at ASB Institutional.

"Until the US dollar turns or people start changing their fundamental bias, the market will still keep buying the Aussie and kiwi on the dips," he said, referring to the trans-Tasman currencies colloquially.
The kiwi rose to 76.22 US cents from 75.79 cents yesterday, and gained to 66.83 on the trade-weighted index of major trading partners' currencies from 66.79.

It rose to 73.82 Australian cents from 73.54 cents yesterday, and rose to 63.11 yen from 62.93 yen.

It rose to 53.99 euro cents from 53.89 cents yesterday, and rose to 47.48 pence from 47.31 pence previously.

The Australian dollar broke above US$1.03 in the session, a key technical level, with the Australian currency continuing to push post-1983 float highs against the greenback.

The trans-Tasman currencies also drew buying support ahead of China's Purchasing Managers' report for March, which is expected to show manufacturing increased at a quicker pace. China is New Zealand's second biggest trading partner after Australia.

The National Bank Business Outlook for March comes out today, with the currency traders looking to assess what impact the Christchurch earthquake has had on business confidence and activity levels.

The kiwi dollar may trade in a range of between 76 US cents and 76.40 cents, said Kelleher, with strong resistance on the topside.