NZ dollar briefly tops A78c

Friday 28th January 2011

The New Zealand dollar briefly pushed above A78c against the Australian dollar for the first time in two months, and pushed higher against the yen which slid broadly after Standard & Poor's cut Japan's long term debt rating.

The kiwi peaked around A78.15c early today, and by 8am was buying A77.86c, up from A77.55c at 5pm yesterday. It was also up to 64.03 yen at 8am from 63.44, and was at US77.30c against the greenback, similar to the 5pm level after a bumpy night.

ANZ bank said disappointing data from the US had helped the NZ dollar keep its gains against the US dollar overnight, after the kiwi was boosted by yesterday's Reserve Bank statement.

While the Reserve Bank had kept the official cash rate at 3% yesterday, the accompanying statement had been less dovish than the market anticipated and the NZ dollar rose significantly on the news, ANZ said.

The NZ dollar had rallied strongly against the aussie after the Reserve Bank statement and had not looked back throughout the offshore session. It had tested the A78c level but pulled back slightly from that figure.

Following the cut to Japan's long term debt rating, Reuters reported that while Japan's fiscal troubles were well known, analysts said the downgrade called into question the yen's status as a safe haven currency, boosting the appeal of the US dollar and the likes of the Swiss franc.

The NZ dollar was little changed against the European currency, buying 0.5633 euro at 8am, while the trade weighted index lifted to 68.91 from 68.79 at 5pm.

NZPA

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