15 Feb 2013

Positive economic news drives up NZ dollar

7:27 pm on 15 February 2013

The New Zealand dollar rose above US85 cents on Friday - its highest level against its American counterpart in 18 months.

The rise of about half a cent follows a 2.1% increase in retail sales volumes in the final quarter of last year which recorded their fastest growth in six years.

Official figures show seasonally-adjusted retail sales rose 1.7% to nearly $18 billion in the last three months of 2012, led by hardware, building and garden sales and bolstered by high sales in Canterbury.

Westpac Bank currency strategist Imre Speizer says the dollar is being driven higher in the wake of stronger economic data emerging from New Zealand.

Mr Speizer told Radio New Zealand's Checkpoint programme on Friday there aren't many developed economies in as positive a position as New Zealand where growth of 3% is expected this year, and slightly more than that in 2014.

Countries such as the United States, Britain and Japan are also devaluing their currencies, making the New Zealand dollar attractive to speculators and investors, he said.

At 5.20pm on Friday, the New Zealand dollar was buying US84.78 cents, 81.88 Australian, 54.60 pence, 79.20 yen and 0.6304 euro. The Trade Weighted Index was 76.85.