New Zealand Dollar Gains as Central Bank Expects Economic GrowthTaylor Tepper
The New Zealand dollar gained against all but one of its 16 most-traded partners after the nation’s central bank said that it expects economic recovery.
The Australian dollar strengthened versus a majority of its major peers as economists predict that a report will show China’s manufacturing expanded this month. China is Australia’s largest trading partner.
“Although the current outlook for the Aussie is generally fraught with bearishness, China could prove a positive wild card for the resource-linked unit, if the recovery under way in the world’s second-largest economy were to show signs of acceleration, boding a better outlook for demand of Australian exports,” Joe Manimbo, a market analyst for Western Union Business Solutions, wrote in a note to clients.
The New Zealand dollar, nicknamed the kiwi, advanced 1 percent to 76.93 yen yesterday, after reaching the highest level since August 2008. The kiwi gained 0.4 percent to 83.88 cents.
Australia’s dollar added 0.8 percent to 95.61 yen and rose 0.1 percent to $1.0425.
Reserve Bank of New Zealand Governor Graeme Wheeler said in a statement that global growth is set to recover in 2013, after leaving the benchmark interest rate unchanged at 2.5 percent. The central bank “does not want to see financial stability or inflation risks accentuated by housing demand getting too far ahead of supply,” he said.
The Purchasing Managers’ Index for China’s manufacturing may rise to 51 in January, the highest since April, from 50.6 last month, according to the median estimate of economists surveyed by Bloomberg News.
The kiwi rose 1.1 percent during the past month among the 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes. The Aussie fell 0.1 percent.