Kiwi touches two-week high against greenback

Tuesday 18th January 2011

The New Zealand dollar pushed to a two-week high against the greenback around US77.45c, amid thin trading conditions due to a public holiday in the US.

By 8am today the kiwi was at US77.30c from US76.82c at 5pm, and was up to 0.5814 euro from 0.5760.

BNZ currency strategist Mike Jones said the NZ dollar was the strongest-performing currency during the 24 hours to 8am, although it spent most of yesterday afternoon on the back foot before climbing overnight.

Partly, the strength of the NZ dollar against the greenback could be attributed to sharp gains by the NZ dollar against the euro overnight. With US markets closed, reduced liquidity likely exacerbated currency movements, Jones said.

Reuters reported that the euro fell broadly as hopes for an immediate increase in the euro zone's bailout fund faded and investors reassessed a recent rise in European Central Bank interest rate expectations.

Uncertainty about whether Germany would support an increase in the effective lending capacity of the safety fund, known as the European Financial Stability Facility, put pressure on the euro ahead of a meeting of euro zone finance ministers. The subject is expected to dominate the talks.

The NZ dollar kept within a tight range against the Australian dollar overnight, touching its highest level in nearly seven weeks around A77.85c, then slipping to A77.73c at 8am.

The kiwi was up to 63.98 yen at 8am from 63.68 at 5pm, while the trade weighted index rose to 69.51 from 69.15.

NZPA

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