Kiwi starts week broadly stronger

Monday 23rd May 2011

The New Zealand dollar started the new week firmer than it had been on Friday evening, although well back from its overnight Friday peak against the greenback near US80c.

At 8am today the kiwi was buying US79.40c, up from US79.12c at 5pm on Saturday, having got to within a whisker of US80c early Saturday, its highest level in 2-1/2 weeks.

The NZ dollar was also up to A74.60c at 8am today from A74.17c, and lifted to 64.93 yen from 64.57 at 5pm on Friday. The kiwi powered up to 0.5620 euro, from 0.5526, having peaked at a three-month high near 0.5635 euro. The trade weighted index rose to 68.97 at 8am from 68.44.

Reuters reported that signs of an easing in risk reduction among investors, with commodities having regained some stability last week after their sharp sell-off earlier in May, had also supported the euro and commodities-related currencies such as the NZ and Australian dollars.

"The commodity stabilisation ... should encourage risk taking in foreign exchange," said Rob Ryan, FX strategist at BNP Paribas in Singapore. "But this is still somewhat lacklustre -- like we are waiting for some green light to take risk."

ANZ bank said offshore markets had rallied the kiwi towards US80c in the overnight Friday session, after a lacklustre local session earlier in the day.

With no local data due today, the NZ dollar should struggle to break higher, ANZ said.

NZPA

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