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NZ dollar falls away after hitting new post-float high


Thursday 28th July 2011

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After hitting a new post-float high against the greenback, the New Zealand dollar fell away as the weak US currency rebounded when investors took a respite from selling.

The kiwi peaked at US87.65c around 8.30pm, according to Reuters data, then fell away to be at US86.96c at 7.30am, ahead of the Reserve Bank's decision on New Zealand interest rates due at 9am today.

The rally by the US dollar came after it had fallen to record lows against the Swiss franc and three-week troughs versus the euro. It recovered as investors locked in profits on short positions in the greenback this week.

It was thought that uncertainty around US debt negotiations should keep the US dollar rally short-lived.

The NZ dollar did rise against the European currency on concerns a new Greek bailout plan agreed last week may not be sufficient to prevent contagion from the debt crisis.

The kiwi rose from 0.6025 euro at 5pm to peak at a 5-1/2-year high 0.6064 euro before easing to 0.6051 at 7.30am.

The NZ dollar also edged lower against its Australian counterpart to A78.94c at 7.30am from A79.13c at 5pm, following yesterday afternoon's dive from around A79.60c which happened when the aussie rocketed in reaction to strong Australian inflation data.

The kiwi also fell to 67.88 yen at 7.30am from 68.10 at 5pm, while the trade weighted index fell to 74.10 from 74.24.

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