The New Zealand dollar climbed above 62 euro cents as a bigger-than-expected Chinese trade surplus stoked investors’ appetite for riskier, or higher-yielding, assets.
The climbed as high as 62.13 euro cents, the highest since the single currency was issued in 2002, and traded at 62.10 cents at 5pm from 61.66 cents at 8am and 61.43 cents yesterday. It rose to 79.31 US cents from 78.55 cents at 8am and 77.86 cents yesterday. It climbed as high as 79.39 US cents, a two-month high.
A bigger-than-expected Chinese trade surplus of US$16.52 billion in December in China stoked investors to seek so-called risk-sensitive assets, amid fears Europe’s burgeoning sovereign debt crisis might weigh on the world’s second biggest economy. Investor sentiment was given a fillip after a meeting between European French President Nicolas Sarkozy and German chancellor Angela Merkel to flesh out the regional austerity programme agreed to by most European nations last month. That saw the kiwi rise to a decade-high against the euro.
“In a risk-on environment, the kiwi and Aussie generally outperform,” said Alex Hill, senior currency strategist at HiFX in Auckland, referring to the trans-Tasman currencies colloquially. “The question now is what will be the catalyst for the next risk-off event, and that could be something to do with a credit rating agency announcement due to Germany or France.”
Rating agency Standard & Poor’s put euro-zone nations on notice before the Dec. 2 summit where members agreed to closer economic integration in return for bigger roles for the regional powerhouse economies Germany and France, and still hasn’t delivered a final edict on the deal yet. France was singled out as potentially facing a downgrade of two notches.
HiFX’s Hill said the market is expecting some kind of resolution either way in the first quarter of the year, though it could come at any time.
He expects the kiwi dollar will continue its trend of slow gains followed by sharp declines through the early part of this year as currency markets continue to face volatility with Europe weighing on the global economy.
Investors largely ignored local data, with no noticeable movement in the currency. New Zealand’s building consents showed approvals dwindled in November, led by a downturn in South Island approvals, while Quotable Value showed property values extended gain in December, and are sitting 3.5 percent below the peak in late 2007.
The kiwi rose to 77.03 Australian cents from 76.66 cents yesterday, and gained to 60.92 yen from 59.93. It climbed to 51.26 British pence from 50.59 pence yesterday, and advanced to 70.97 on the trade-weighted index form 70.11.
(BusinessDesk)
1 Comments
This might slow things down - risk off anyone?
But cheaper export transport costs for NZ? Don't you think our port workers are being railroaded to offset the losses of overcapacity being endured by the likes of Maersk
Last year alone, according to London-based Braemar Seascope shipbrokers, total deliveries of Capesize dry bulk carriers – the largest kind – are expected to reach 220, increasing worldwide fleet capacity by nearly 21 per cent. Another 230 are due in 2012
...Yet it is only now, eight years later, that the most far-reaching effect of the surge in seaborne trade volumes is making itself felt. The jump in earnings it produced for container ships, dry bulk carriers and oil tankers encouraged many shipowners to order far more vessels than could ever have been needed. Many have been delivered last year or will be delivered in 2012, into shipping markets growing far more slowly than when the boom was at its height. The impact will be felt far beyond the sector. Many of the banks most exposed to shipping companies’ estimated $450bn of debt are in crisis-hit Europe. Private investors are being harder hit than in earlier shipping crises. Future vital investment in the industry could be put in doubt.
Importers and exporters and hard-pressed consumers, however, may find a silver lining amid these dark clouds; they could benefit from years of nearly negligible transport costs.As a result of the extra capacity, all three main shipping segments – tankers, container ships and dry bulk – have struggled for at least some of this year to cover operating costs.
http://www.ft.com/intl/cms/s/0/ca300abc-2bdf-11e1-b194-00144feabdc0.html#axzz1j0yBYYXL
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