The New Zealand dollar climbed today as data showed an expansion of the manufacturing sector. Not all fundamentals were good, but this did not deter the currency from reaching the highest level since August 2011 against the US dollar and the strongest price since February 2008 versus the Japanese yen.
The BNZ-BusinessNZ seasonally adjusted PMI was at 53.4 in March. It was a drop from the February’s 56.0, but could still be considered “a continuation of healthy expansion in the sector”. The Food Price Index dropped 1.3 percent in March from February, when it declined 0.3 percent.
Domestic fundamentals were not completely positive for the NZ dollar, but the market sentiment inclined towards risk appetite, supporting the currency. Quantitative easing in the United States and Japan weakens their respective currencies, making NZD especially strong versus USD and JPY.
NZD/USD rallied from 0.8572 to 0.8629 (the daily high was at 0.8674) and NZD/JPY advanced from 85.51 to 85.99 (reaching 86.39 intraday) as of 23:49 GMT today.
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