Kiwi breaks through US76c zone

Friday 18th February 2011

The New Zealand dollar marched into the US76c zone on Friday after flirting with falling below US75c earlier in the week.

The kiwi firmed amid a broad decline by the greenback as Middle East tensions boosted the appeal of other safe-haven currencies, particularly the Swiss franc.

By 5pm the NZ dollar was buying US76.01c rising from US75.89c at 8am and US75.47c at 5pm yesterday.

BNZ strategist Kymberly Martin said the NZ and Australian dollars were beneficiaries of higher commodity prices overnight.

The NZ dollar continued to be torn between the positive impact of strong and rising global commodity prices, and the negative impact of near-term weakness in domestic data.

The weak patch of domestic New Zealand data continued to result in an interest rate differential that favoured the Australian dollar relative to the NZ dollar.

Popular unrest in Bahrain, Libya and Yemen as well as concerns about Iranian warships transiting the Suez Canal had fostered uncertainty among international investors in recent days.

The Swiss currency, traditionally sought in times of heightened geopolitical tension, stayed near two-week highs versus the dollar and euro as unrest spread across the Middle East and North Africa.

The NZ dollar reached A75.04, down from A75.24c at 5pm yesterday.

Meanwhile, the kiwi rose to 0.5584 euro from 0.5557 at 5pm the previous day, and lifted to 63.33 yen from 63.30.

NZPA

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