Forex Market: NZD/USD touches fresh 2-1/2-year highs as NZ trade surplus widens the most since April 2011

The kiwi, as the New Zealand dollar is best known, advanced to the strongest level since August 2011 against its US counterpart, after data showed the New Zealand trade surplus widened to almost a three-year high last month.

NZD/USD hit a session high at 0.8680 at 08:40 GMT, after which consolidation followed at 0.8678, adding 1.02% for the day. Support was likely to be received at March 26th low, 0.8671, while resistance was to be encountered at August 2nd 2011 high, 0.8784.

The New Zealand kiwi headed for the biggest one-day gain since January 3rd after the country posted higher-than-expected trade surplus and Reserve Bank of New Zealand (RBNZ) Deputy Governor Grant Spencer said the rebuilding of Christchurch would add to inflation risks.

“The kiwi is extending yesterday’s moves where the dollar was weaker versus higher-yielding currencies across the board,” said Kengo Suzuki, the chief currency strategist at Mizuho Securities Co. in Tokyo, cited by Bloomberg. “It was helped also by the Aussie’s gain after the RBA governor indicated optimism about the Australian economy and refrained from jawboning the currency.”

Demand for New Zealands dollar was heightened after a report showed the nation had a trade surplus of 818 million NZ dollars (around $706 million), more than the 600 million forecast by analysts and the largest trade surplus since April 2011.

The RBNZ was the first central bank from the developed economies, to raise its cash rate. The central bank raised its benchmark interest rate by 25 basis points to 2.75% on March 13th.

In a speech at Hong Kong, Deputy Governor Spencer indicated that the RBNZs loan may have reduced pressure on the nations currency.

The kiwi dollar has climbed 5.4 percent this year, the most among 16 major currencies tracked by Bloomberg Correlation-Weighted Indexes.

Elsewhere, AUD/USD hit a session high at 0.9244 at 08:40 GMT, after which consolidation followed at 0.9232, adding 0.07% for the day. Support was likely to be received at March 26th low, 0.9154, while resistance was to be encountered at November 22nd high, 0.9250.