New Zealand's dollar climbed for a second day as the UBS Bloomberg Constant Maturity Commodity Index added 1.4 percent. The currency may gain versus the yen as investors return to so-called carry trades after Washington Mutual Inc., the largest U.S. savings and loan, rallied the most in almost 25 years on speculation it will get a $5 billion investment.
New Zealand's currency strengthened to 79.44 U.S. cents from 79.42 cents late in Asia yesterday. It was at 81.35 yen after earlier touching 82.03 yen, the strongest since March 14, from 81.43 yen.
Commodities make up 70 percent of total overseas shipments from New Zealand.
The New Zealand dollar is favorites of carry trades because the benchmark interest rates is at 8.25 percent, compared with 2.25 percent in the U.S. and 0.5 percent in Japan.
Gains in New Zealand's dollar may be limited after a New Zealand Institute of Economic Research survey showed today that business confidence slumped to the lowest level in 33 years.
A net 64 percent of companies say the economy will deteriorate in the next six months, according to the survey, adding to signs that economic growth will slow this year and increasing the chance of a rate cut.