This Tuesday, a report posted in New Zealand surprised economists’ forecasts as retail sales in the South Pacific country came with better-than-expected growth, adding optimism to the already attractive kiwi, one of the best performing currencies in foreign-exchange markets in 2009.
The kiwi climbed today versus several majors like the pound and the yen, and touched a one-year high versus the greenback after retail sales expanded more than doubled of what forecasts suggested, a strong indication that the South Pacific nation is acting efficiently to dodge recession, creating expectations among traders that New Zealand will follow its regional partner, Australia, to start to raise interest rates in the following months. A rise in stocks also provided support for the kiwi and the Aussie to climb further versus the greenback, as their higher-yielding commodity profile is becoming the most attractive bet in currency markets during the second semester of 2009.
A combination of a bad sentiment towards the greenback combined with a rally in stocks and positive reports in the South Pacific region is providing support for the New Zealand dollar to become one of the best performing currencies in foreign-exchange markets, extending its record highs virtually every week, and the forecasts indicate that this trend is likely to continue.
NZD/USD traded at 0.7374 as of 12:30 GMT from a previous rate of 0.7340 yesterday.
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