Wednesday, 23 September 2009

Kiwi surges as NZ exits recession

The kiwi surged up nearly two cents (0.8%) against the pound yesterday, as positive economic data spurred demand for higher-yielding currencies.
  • Government data early yesterday morning showed that New Zealand’s current-account deficit shrank to its lowest level since 2004, which buoyed investor confidence in kiwi assets.
  • In addition, the Fonterra Cooperative Group, the world's largest milk exporter, boosted its milk-price forecast for the year ahead by 12%, a positive development for the economically important dairy sector, which supported demand for the kiwi.
  • The kiwi also benefitted from a broader rise in risk activity in the market, as investors chose to sell the dollar in favour of higher-risk positions.
  • New Zealand and has enjoyed more positive economic data this morning, with the country posting a positive growth figure in third quarter of 0.1%, higher than a forecast -0.2%
  • The markets have responded strongly to the news, although it had been assumed for some time, with the kiwi advancing a further 0.8% in trading so far today.

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