NZ dollar edges up versus greenback as commodities revive

Photo / Dean Purcell

The New Zealand dollar inched higher against the greenback overnight with elevated commodity prices helping the kiwi gain against a volatile US dollar.

Demand for the kiwi was helped by commodity prices continuing to claw back some of the ground they lost earlier in the week, when Japan raised the level of its nuclear crisis to that the 1986 Chernobyl disaster.

The Thompson Reuters Jefferies CRB Index, a broad measure of 19 commodities, rose 0.3 per cent to 360.66.

"The kiwi has been riding its upward momentum for a while now, but it uncertain if that's sustainable for much longer" said Kymberley Martin, a markets strategist at Bank of New Zealand.

"Our risk appetite indicator held up at around 72 per cent, which is quite an elevated level. That's a key area of risk for the kiwi and if anything impacts that it we'll see it come off."

The kiwi rose to 79.27 US cents from 79.18 cents yesterday, and was little changed at 68.70 on the trade-weighted index of major trading partners' currencies from 68.71. It fell to 75.18.

Australian cents from 75.31 cents yesterday, and was little changed 66.13 yen from 66.12 yen. It was broadly unchanged at 54.71 euro cents from 54.69 cents yesterday, and fell to 48.49 pence from 48.54 pence previously.

Traders will be looking to the release of Chinese consumer index data for March at 2pm local time, for a read on whether authorities will implement further policy tightening to curb rampant inflation in the world's second largest economy.

The kiwi dollar may trade in between a range of 78.80 US cents and 79.75 cents, Martin said.