New Zealand Dollar Strengthens To 4-day Highs Against Most Majors

Monday morning in Asia, the New Zealand dollar rose to 4-day highs against the currencies of US, Japan and Europe. On the other hand, the NZ dollar showed choppy trading versus the aussie.

The New Zealand stock market was trading higher today, led by top stocks, Telecom, Contact Energy and Fletcher Building. At 8.15 PM ET, the benchmark NZX 50 Index was advancing 34.74 points or 1.04% to 3,370.92, while the NZX All Capital Index was gaining 31.58 points or 0.93% to 3,418.87. The week ahead is busy for New Zealand with the Reserve Bank's monetary policy meeting on Thursday, taking center stage. With everyone expecting a 25 basis point-cut in interest rates from 8.00%, most interest was likely to focus on the accompanying macroeconomic and financial forecasts. The New Zealand retail sales report for July has been scheduled for release on Friday. The New Zealand dollar traded higher against its US and Japanese counterparts during early Asian deals on Monday. At about 5:45 pm ET, the kiwi reached 4-day highs of 0.6847 against the greenback and 74.64 against the yen, compared to Friday's close of 0.6673 and 71.64, respectively. The kiwi then weakened slightly but it rebounded shortly and is now worth 0.6826 against the greenback and 74.28 against the yen. If the NZ dollar gains further, it is likely to target the 0.722 level against the US currency and the 79 level against the yen. The Bank of Japan said today that bank lending in Japan increased by 2% on year, holding a steady rate of annual increase from the previous month. Including trusts, bank lending was flat on year at 1.8%. On a seasonally adjusted basis, bank lending increased 2.4% on year, easing from the 2.5% gain in July. The central bank also said that M3 money stocks were up 1.0% on year in August, higher than the 0.9% forecast and the 0.8% annual increase in the previous month. M2 money stocks jumped 2.4% on year, higher than the 2.1% percent forecast that also was July's reading. In early Asian trading on Monday, the New Zealand dollar also climbed to a 4-day high of 2.1020 against the euro. The next upside target level for the kiwi is seen around 2.085. The euro-kiwi pair closed Friday's deals at 2.1341. Against the Australian currency, the NZ dollar largely bounced between 1.2164 and 1.2263 in early Asian deals on Monday. The immediate support and resistance levels for the aussie-kiwi pair are seen around 1.211 and 1.236, respectively. The pair was worth 1.2181 at last week's close. The Australia and New Zealand Banking Corp said today that the volume of advertisements for jobs in Australian newspapers and on the Internet was down 4.9 percent in August from the previous month. The August figure marks the sharpest decline in seven years, and it follows a 0.3 percent monthly decline in July. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved