NZ dollar gains as renewed risk appetite pushes Asian stocks higher

The New Zealand dollar gained in local trading as investors’ appetite for higher-yielding assets bounced back, though a slew of data showing slower global growth this week may temper those gains.

The kiwi rose to 84.33 US cents at 5pm in Wellington from 83.91 cents at 8am, and 84.19 cents on Friday in New York. The trade-weighted index advanced to 78.01 from 77.91 last week.

Stocks across Asia rose in afternoon trading, with Japan’s Nikkei 225 index up 1.8 percent and Australia’s S&PASX 200 gaining 0.5 percent as investors regained some confidence after a sell-off in the lead up to the weekend’s Group of 20 nations meeting. Those gains may be temporary with data this week expected to show global growth may have faltered in the first three months of the year.

“The Aussie and the kiwi are trading pretty close to the middle of the range for the year,” said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. “The surprising thing was the big strong patch a couple of weeks ago – it’s come off high levels, but not compared to the rest of the year.”

Government figures today showed New Zealand reported a monthly inflow of 1,220 new migrants in March, the since January 2010.

Investors are preparing for a dense week for economic news, with sales and prices of US homes and PMI are out on Tuesday, the Reserve Bank of New Zealand interest rate review, Australian inflation figures and US durable goods on Wednesday, UK gross domestic product on Thursday and on Friday, New Zealand’s trade balance, the Bank of Japan’s decision and US GDP data are due.

The kiwi may trade in a range of 83.30 US cents to 85 cents this week, according to a BusinessDesk survey, and is more likely to test the lower end of that range.

The local currency was almost unchanged at 64.51 euro cents at 5pm in Wellington and increased to 55.38 British pence from 55.27 pence. It was little changed at 81.98 Australian cents from 81.90 cents and rose to 84.11 yen from 83.77 yen last week.

(BusinessDesk)