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NZ dollar drives higher against greenback


Friday 22nd July 2011

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The New Zealand dollar's astounding drive higher against the greenback continued, with the kiwi pushing above US86c to yet further uncharted territory in the post-float era.

The kiwi peaked early today around US86.40c, having climbed from US85.69c at 5pm, and by 8am today was buying US86.23c. The NZ dollar has risen from US76c at the start of April.

ANZ bank said the NZ dollar went along for the ride overnight as the euro rallied against the US dollar, and questioned whether the kiwi could hold onto its overnight gains.

Markets were building in a marginal possibility that the Reserve Bank could deliver an extremely hawkish statement at the official cash rate review next week, but such optimism could be misplaced, ANZ said.

The euro's gain was made after a draft plan by European officials to provide cheap loans to Greece and other heavily indebted euro zone countries eased fears that sovereign debt problems would spread further through Europe.

Westpac senior market strategist Imre Speizer said risk appetite had surged after signs the European summit on Greece was making significant progress. Risk seeking had caused the US dollar index to fall.

The kiwi also pushed up towards recent highs against the euro and Australian dollar but was unable to hold those levels and fell back.

The NZ dollar was at A79.61c at 8am from A79.87c at 5pm, and edged lower to 0.5997 euro. It moved up to 67.65 yen at 8am from 67.48, while the trade weighted index lifted to 73.80 at 8am from 73.72.

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