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Kiwi hits 10-month high as oil, dairy lift

NZ NewswireNZ Newswire 19/04/2016

The New Zealand dollar has risen to a 10-month high as commodities continue their rally, and as prices for the country's biggest export, dairy, rise.

The kiwi climbed as high as US70.54 cents and was trading at US70.48c at 8am on Wednesday from US69.96c on Tuesday. The trade-weighted index gained to 73.78 from 73.06.

Oil prices have extended their recovery from a slump on Monday when investors were disappointed by producers' inability to rein in production, and helped push up the Thompson Reuters/CoreCommodity CRB index 2.2 per cent.

That stoked demand for commodity sensitive currencies such as the kiwi dollar, which also got a fillip from a bigger-than-expected gain in dairy prices.

"The modest positive result from the overnight GDT dairy auction (+3.8 per cent) allowed the upward momentum to continue unabated," BNZ strategist Kymberly Martin said in a note.

The kiwi was now at its highest level since mid-June last year and the trade-weighted index was 4 per cent above the Reserve Bank's projections for the current quarter average, she said.

On Wednesday morning, the local currency increased to 62.03 euro cents from 61.79c on Tuesday after European Central Bank figures showed the region's credit conditions eased in the first quarter.

The kiwi was little changed at 48.95 British pence from 48.91p, increased to 90.14 Australian cents from A89.97 c, advanced to 76.92 yen from 76.30 yen and gained to 4.5516 Chinese yuan from 4.5292 yuan.

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