NZ dollar surges to new post-float high

NZPA

Monday 11th July 2011

The New Zealand dollar surged to a new post-float high against the greenback, as significantly weaker-than-expected United States jobs data raised expectations the Federal Reserve would leave US interest rates low well into next year.

Data showed US employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months.

The kiwi climbed from US83.15c at 5pm on Friday, to peak around US83.80c, its highest level since the currency was floated in March 1985. By 8am today it was still at elevated levels, buying US83.63c.

The US dollar did gain against the euro, as concern grew that Italy could get caught up in the European debt crisis.

The yield on Italy's bonds has risen, meaning investors consider it to be riskier and are asking for a premium to lend to it. On Friday the Italian stock market fell 3.5 percent with financial and bank stocks taking the biggest hit.

Today, it was reported an emergency meeting of top officials dealing with the euro zone debt crisis had been called.

The NZ dollar rose from 0.5799 euro at 5pm on Friday, to peak at a six-month high near 0.5880, before easing to 0.5871 at 8am today.

Against the Australian dollar, the kiwi rose from A77.19c on Friday evening to its highest level in a month just shy of A80c, and was only slightly lower at A77.91c at 8am.

The NZ dollar did edge lower to 67.42 yen at 8am today from 67.58 at 5pm on Friday, while the trade weighted index rose to 72.25 from 71.76.

NZPA

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