Better than expected trade data helped the New Zealand dollar hold overnight gains today.
Statistics New Zealand reported a surprise $19 million trade surplus for the country in April, confounding local economists who had predicted a $180 million deficit.
The kiwi peaked at a near-three week high above US63.60c after the data. Around 5pm it was buying US63.41c, nearly US1c more than it was 24 hours earlier, and also up from US63.24c at 8.30am.
Against the Australian currency the New Zealand dollar was buying A84.39c, up more than A1c on the day before and slightly ahead of A84.05c this morning.
Bank of New Zealand chief economist Tony Alexander said the kiwi was lifted in the past week by several factors, one being this morning's better than expected merchandise trade figures.
The gave some hope the current account deficit would soon be cyclically improving, he said.
The NZD also benefited from falls in minerals commodities prices, pushing the Australian dollar lower and causing some profit-taking from those who recently were selling the kiwi and buying the Australian dollar.
Despite the recent increase in the kiwi, it was expected to resume its cyclical decline at some point this year, Mr Alexander said.
The recent period of strength was not surprising and could continue for some time with better than expected export numbers and other indicators, such as confidence, measures also up.
The US dollar steadied on Thursday after recovering against the euro and the yen the previous session on upbeat housing data that tilted expectations toward the Federal Reserve raising interest rates in June.
A report on Thursday also showed Japan's trade surplus shrank by a surprisingly big 31.8 per cent in April from a year earlier.
But the drop only underscored the strength of the global economy, with exports to China and the United States still brisk while buoyant domestic demand boosted imports.
The following are Reuters currency rates:
5pm today 5pm Wednesday
NZ dlr US63.41c US62.46c
NZ dlr/Aust dlr A84.39c A83.19c
NZ dlr/euro 0.4971 0.4888
NZ dlr/yen 71.48 70.16
NZ dlr/stg 33.94 33.27
NZ TWI 63.27 62.23
Australian dollar US75.14c US75.11c
Euro/US dollar US1.2755 US1.2787
US dollar/yen 112.75 112.31
- NZPA
<i>Currency:</i> Better than expected trade data helps NZD hold gains
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