The New Zealand dollar rose against the greenback as global equities managed to hold onto their gains despite a string of weaker US economic data, suggesting investors' appetite for higher-yielding, or riskier, assets is starting to show some resiliency.
The New Zealand dollar recently traded at 85.49 US cents, up from 85.02 cents yesterday, and rose to 72.96 on the trade-weighted index of major trading partners' currencies from 72.58 previously.
Global stock markets extended recent gains amid volatile trading as investors continued to search for oversold assets, with the Standard & Poor's 500 Index gaining 0.7 per cent to 12189.50, and Europe's Stoxx closing 1 per cent higher at 230.60. The robust appetite for risk saw increased demand for growth-linked currencies such as the kiwi and Australian dollars.
"We're broadly tracking equity markets, with equity markets being a broad reflection of the risk environment, though the kiwi has outperformed" said Mike Hollows, director of trading at HiFX in Auckland. "The global environment remains quite flat and anything that shows modest growth will stand out. We're seeing some hot money move into the Australasia currencies."
Still, sentiment was tempered after a weaker run of US consumer confidence and housing data. Gold reversed declines, with the previous metal recently trading at US$1,835.50 an ounce, up from US$1,795.69 yesterday, and yields on US 10-year Treasury Bills fell to 2.18 per cent from 2.22 per cent
