NZ dollar up on US, lower on Aussie

Friday 3rd December 2010

The New Zealand dollar emerged from a "night of vicious volatility in currency markets" firmer against the greenback and lower compared to the Australian currency.

At 8am the kiwi was buying US75.39c from US75.08c at 5pm yesterday, while falling to A77.29c from A77.91c.

The NZ dollar also eased lower against the European currency, slipping to 0.5711 euro at 8am from 0.5728 at 5pm.

The euro gained broadly, boosted by reports the European Central Bank was buying Portuguese and Irish bonds. That followed investor disappointment ECB President Jean-Claude Trichet did not announce a more aggressive policy response to ease the euro zone debt crisis.

BNZ currency strategist Mike Jones said the NZ dollar had traded in a wide range during a night of vicious volatility in currency markets.

It had initially fallen to almost US74.50c but rose later in the overnight session thanks to a late improvement in investors' risk appetite.

ANZ bank said rising commodity prices overnight had lifted the aussie, and with it the NZ dollar.

But attempts by the kiwi to break above resistance at A78c failed as the higher commodity prices favoured the Australian over the NZ dollar, ANZ said.

"Slightly weaker Australian retail sales data yesterday provided only a temporary relief for local importers on this cross. Today it should remain on the back foot."

The NZ dollar was little changed at 63.15 yen by 8am, while the trade weighted index was lower at 68.41 from 68.48 at 5pm.

NZPA

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