19 Sep 2013

NZ dollar surges against US

7:56 pm on 19 September 2013

The New Zealand dollar jumped 1.5 US cents on Thursday, propelled by both offshore events and local news.

Bancorp Treasury Service client advisor Peter Cavanaugh says the kiwi strengthened across the board.

He says the GDP figure has been better than expected, not just for the June quarter but there have also been upward revisions to previous quarters, which has meant year-on-year New Zealand is tracking at about 2.5% which is good in a global context.

Mr Cavanaugh says the New Zealand dollar has spiked against the US dollar, as with most of New Zealand's trading partners, because of a sudden weakness in the US dollar following the Federal Reserve's decision to refrain from tampering back their bond purchase programme.

At about 5pm, the kiwi was trading at 83.87 US cents.

It gained about a third of an Australian cent to 88.42 cents, a third of a British penny to 52.02 pence, half a euro to 62 euro and about a yen to 82.42 yen.

Sharemarket also strong

The share market was also very strong, the benchmark Top 50 share index jumped 49 points, or 1%, to 4753.

Craigs Investment Partners head of wealth research Mark Lister says the Federal Reserve's decision pushed US stocks up very strongly, the Standard & Poor's 500 Index gained more than 1.2%.

He says when markets in this part of the world opened they have simply followed that strong US market on the back of that news.

Mr Lister says in New Zealand a lot of the blue chip stocks have risen in a broad based rally.

The Warehouse rose 11 cents to $3.86, Auckland International Airport gained 7.5 cents to $3.36.5, Fletcher Building climbed 19 cents to $9.83 and Mighty River Power put on 3 cents to $2.20.

But Mr Lister says on the back of the New Zealand dollar strengthening against the US, some export stocks such as Fisher & Paykel Healthcare and Sanford have seen some weakness on the assumption that their profits will be impacted in the short term by a higher currency.

Fisher & Paykel Healthcare shed 5 cents to $3.63 while Sanford fell 5 cents to $4.40.