Bloomberg News

N.Z. Dollar Gains for Sixth Week After Unexpected Trade Surplus

January 29, 2012

Jan. 27 (Bloomberg) -- New Zealand’s dollar rose for a sixth straight week after a report showed the nation unexpectedly posted its first trade surplus in five months.

The so-called kiwi held a five-day advance against most of its major peers as Reserve Bank of New Zealand Governor Alan Bollard said the nation’s economy can weather a global slowdown. Demand for New Zealand’s dollar and its Australian counterpart was limited on concern Greece is struggling to reach agreement with its creditors on a debt-swap arrangement, curbing demand for higher-yielding assets.

“We are seeing ongoing offshore demand for kiwi dollars,” said Tim Kelleher, head of institutional foreign-exchange sales in Auckland at ASB Institutional, a unit of Commonwealth Bank of Australia. New Zealand’s economy is “going OK, and certainly some of the individual sectors of the country are doing quite well,” he said.

The kiwi dollar rose 0.2 percent to 82.36 U.S. cents at 11:47 a.m. in New York, advancing 2.1 percent this week. It dropped 0.7 percent to 63.17 yen, trimming the five-day surge to 1.7 percent. Australia’s currency advanced 0.1 percent to $1.0640 and dropped 0.9 percent to 81.62 yen.

New Zealand’s exports exceeded imports by NZ$338 million ($278 million) in December, the statistics bureau said today, whereas economists surveyed by Bloomberg News had predicted a NZ$50 million shortfall. A separate report from the Treasury Department showed the government’s budget deficit was wider than previously forecast in the five months through November on weaker-than-projected tax revenue.

‘Gradual Lift’

The RBNZ expects a “gradual lift in activity over 2012, consistent with demolition and repairs to housing and infrastructure getting under way,” with full-scale reconstruction expected in 2013, Governor Bollard said in Christchurch today.

Bollard had previously said he expected rebuilding to pick up in the second half of this year. The central bank kept the official cash rate at a record-low 2.5 percent yesterday.

European Union Economic and Monetary Affairs Commissioner Olli Rehn said Greece was “close” to reaching agreement with its creditors.

“The next three days will be very crucial,” Rehn said at the World Economic Forum in Davos, Switzerland. An agreement may come “if not today, then over the weekend,” he said.

New Zealand’s dollar has appreciated 1.1 percent in the past week, the best performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The so-called Aussie gained 0.3 percent in the same period.

--With assistance from Catarina Saraiva in New York. Editors: Naoto Hosoda, Ken McCallum

To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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