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NZ dollar rises overnight

Wednesday 9th February 2011

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The New Zealand dollar pushed to its highest level against the greenback in nearly a week, although it fell away quickly after peaking.

By 8am the kiwi was buying US77.53c, up from US77.20c at 5pm, having climbed to about US77.90c around 6.45am.

The US dollar fell across the board as investors ventured away from safe-haven currencies after tensions in Egypt eased.

The euro, on the other hand, recovered broadly, lifted by demand from Asian central banks and buying against the Australian dollar.

BNZ currency strategist Mike Jones said the NZ dollar was propelled higher overnight by the broadly weaker US dollar and solid buying of the NZ currency against the Australian dollar.

A surprise 25-basis point Chinese rate hike - at midnight (NZT) - did little to disrupt upbeat sentiment that had characterised financial markets of late.

An attempt by Prime Minister John Key yesterday to jawbone the NZ dollar, reiterating the headwinds faced by this country's export sector from the strengthening kiwi, had only a fleeting effect on the currency, Jones said.

The NZ dollar reached a three-week high against the European currency, around 0.5710 euro about 10pm yesterday, then fell away to 0.5687 by 8am, still above the 0.5671 at 5pm.

Against the aussie, the NZ dollar rose to A76.37c at 8am from A76.11c at 5pm, and lifted to 63.76 yen from 63.54. The trade weighted index rose to 68.81 from 68.54.



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