FX: NZ Dollar Rises Despite Central Bank’s Desire for Depreciation
The New Zealand dollar strengthened today on favorable data from the US, which indicted accelerated economic recovery. Statistics about increased employment in the US last month coupled with rising equities is expected to diminish the impact of European sovereign debt crisis on the global markets. The Standard & Poor’s 500 Index increased by 0.5 percent recently.
The NZD spiked despite the central bank’s plans to increase the interest rates to counter New Zealand’s trade surplus, which reached 11% in April. The exports are expected to increase further as the growing Chinese economy will increase the nation’s demand for New Zealand’s wool and milk. Governor of the Reserve Bank of New Zealand, Alan Bollard has stated that a gradual depreciation of the NZD will aid in sustainable rebalancing of the nation’s economy.
AUD/NZD traded at 1.2317 at about 16:45 GMT today, after opened at 1.2345. NZD/USD traded at 0.6804, a plunge from the opening rate of 0.6813. EUR/NZD traded at 1.7868.
