- Currencies touched highest in at least four weeks on Wednesday
- `Still in a sluggish global growth environment': BNZ's Wong
The New Zealand and the Canadian dollars pared weekly gains as investors remained skeptical that a rally in commodity prices will last.
The kiwi and loonie climbed to their highest levels in at least four weeks Wednesday as the greenback plunged after signs of a slowing U.S. economy helped derail bets on diverging policies between global central banks. Oil rose for a second day Thursday, extending the biggest gain in almost two weeks and paring its loss for the year to 12 percent.
“I’d still be pretty skeptical of the recovery we’ve seen in commodity currencies as oil prices are probably going to head lower and there’s downside risk for other commodities,” said Jason Wong, a currency strategist at Bank of New Zealand Ltd. in Wellington. “It could turn later in the year, but I don’t think we’re near that point yet as we’re still in a sluggish global growth environment.”
The New Zealand and Canadian dollars were little changed at 66.62 U.S. cents and C$1.3763 per greenback, respectively, from Wednesday as of 9:56 a.m. in Tokyo. The kiwi was still set for a 2.8 percent gain this week, while the loonie was poised for a 1.6 percent advance.
New Zealand’s dollar touched 66.98 U.S. cents Wednesday, the highest since Jan. 6, after a report showed the nation’s unemployment rate fell to a six-year low of 5.3 percent in the fourth quarter. Canada’s currency touched C$1.3757 in New York, the strongest since Dec. 16, as oil climbed back above $30 per barrel.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 global peers, was little changed at 1,226.82 from Wednesday. The gauge slumped as much as 1.9 percent in New York, the biggest loss since 2009.