NZ dollar rises to highest level in more than 2 months as commodities gain

The NZ dollar rose to its highest level in more than two months as commodities gained. Photo / File

The New Zealand dollar rose to its highest level in more than two months as gains in prices of raw materials lifted commodity-linked currencies and the greenback weakened.

The kiwi traded at 71.04 US cents as at 8am in Wellington, and earlier touched 71.30 cents the highest since late October, from 71.03 cents late yesterday. The trade-weighted index was little changed from yesterday at 73.88.

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The CRB Index of 19 commonly traded commodities rose 0.4 per cent to the highest level in almost 12 months as crude oil traded near its highest levels in 2 1/2 years and gold gained.

The kiwi didn't move much after the results of the latest Global Dairy Trade auction, which showed the GDT price index rose 2.2 per cent as the volume of product sold fell to 25,400 tonnes from 29,592 tonnes two weeks ago. Whole milk powder climbed 4.2 per cent. the greenback fell to the lowest level in more than three months.

"Commodities have been rallying across the board, and that's putting some pressure on the [US] dollar," Brad Bechtel, a currency strategist at Jefferies, told Bloomberg. "It's a tough road ahead for the dollar."

Helping underpin commodity prices and the kiwi and Australian dollars, figures yesterday showed gains in the Caixin survey of manufacturing, a major purchaser of Australia's iron ore and coal and New Zealand's milk powder.

The kiwi dollar fell to 52.25 British pence from 52.60 pence yesterday as the pound strengthened against the greenback on optimism German Chancellor Angela Merkel's ability to create a new coalition government will boost the odds of a favourable post-Brexit trade deal with the UK.

The kiwi fell to 90.74 Australian cents from 91 cents yesterday and declined to 58.96 euro cents from 59.14 cents. It fell to 79.80 yen from 80.02 yen and dropped to 4.6112 yuan from 4.6221 yuan.