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Kiwi recovers from dip on plunging confidence

Friday 1st April 2011

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The New Zealand dollar recovered from yesterday's confidence-related dip, to peak slightly above the level it was at when the devastating earthquake hit Christchurch on February 22.

The kiwi climbed to around US76.45c early today, easing to US76.32c at 8am, having climbed from US75.82c at 5pm yesterday.

BNZ currency strategist Mike Jones said the tailwinds of a retreating US dollar and surging global commodity prices had propelled the NZ dollar's rebound.

While the headline results of yesterday's March National Bank Business Outlook - net confidence down to -9 from +34 in February - did not look good, underlying impressions were not that bad, Mr Jones said.

Overnight, encouraging US and European data had inspired optimism in the global outlook, buoying investors' risk appetite.

Real money and speculative appetite for commodity-linked currencies, such as the Australian and NZ dollars, was bolstered, Jones said.

The aussie climbed to a fresh post-float high above US$1.0360, with the NZ dollar rebounding on its coat-tails against the greenback.

The NZ dollar remained within a restricted range against the aussie edging up to A73.64c at 8am from A73.48c at 5pm, and was up to 63.41 yen from 62.65, while being little changed at 0.5375 euro. The trade weighted index was up to 66.78 at 8am from 66.47 at 5pm.



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