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Commodity prices lift kiwi

NZ Newswire logoNZ Newswire 15/08/2016

NZ dollar © Getty NZ dollar The New Zealand dollar has gained along with other commodity-linked currencies as a pick-up in prices of raw materials boosted sentiment ahead of the GlobalDairyTrade auction.

The kiwi dollar rose to US72.08 cents as at 8am on Tuesday in Wellington, from US71.75c late on Monday. The trade-weighted index climbed to 76.33 from 76.07.

The Thomson Reuters/CoreCommodity CRB index, a broad measure of prices for raw materials, rose 1.3 per cent to a month-high of 185, while Brent crude oil gained about 3 per cent to $US48.41 a barrel. Rising commodity prices tend to benefit the currencies of nations that export raw materials, such as Australia's iron ore, coal and crude oil and New Zealand's dairy, meat and logs.

Dairy futures suggest whole milk powder will rise about 10 per cent in this week's auction, adding to a 10 per cent gain in the last sale two weeks ago.

"USD remains out of favour and the commodity currencies have seen modest gains," said BNZ currency strategist Jason Wong.

"Expectations are high ahead of the next GDT dairy auction overnight, with another strong gain in prices - possibly as high as 10 per cent for whole milk powder - widely anticipated."

Mr Wong said the kiwi may reach resistance at US73c, a level it has failed to sustainably breach in recent months.

On Tuesday morning, the kiwi rose to 93.92 Australian cents from A93.79c and gained to 4.7826 yuan from 4.7699 yuan. It rose to 55.94 British pence from 55.53p, gained to 64.44 euro cents from 64.31c and advanced to 72.96 yen from 72.68 yen.

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