Kiwi rises as Aussie dollar takes off

Wednesday 20th April 2011

The New Zealand dollar rose today on the coat tails of an Australian dollar that climbed to a fresh 29-year high.

The US dollar is under renewed pressure, this time from a strong euro.

The NZ dollar was at US79.24c at 5pm from US78.79c at 8am and US78.44c at 5pm yesterday.

The rise in the Australian dollar to US$1.0599 came after Australian export prices rose faster than import prices in the March quarter, continuing a trend towards a more favourable terms of trade for Australia.

The export price index compiled by the Australian Bureau of Statistics bounced back by 5.2% in the quarter, after a dip of 8.1% the quarter before.

Early on Monday, the NZ dollar had briefly topped US80c for the first time in three years. Its post-float high is US82.13c. Westpac said earlier this week that it expected a sustained move into the US80s as signalling an eventual test of the post-float high.

ANZ bank said the investigation of support levels for the NZ dollar during the local session yesterday had been countered by familiar demand in the offshore session.

Trading on global markets overnight had been much calmer, with risk coming back into favour, ANZ said.

A tumble in global equities yesterday and overnight Monday had been sparked by mounting fears about the future of Greece's massive debt and Standard & Poor's threat to cut the United State's blue chip AAA credit rating.

The euro has rebounded against the US dollar as strong economic data reassured markets about growth in major euro zone countries, despite the mounting fears that Greece may have to restructure its debt.

The NZ dollar lost ground against the strong Australian dollar to be A74.86c at 5pm from A74.91c at 8am and A74.98c at 5pm yesterday.

It was at 0.5506 euro from 0.5517 at 5pm yesterday and at 65.74 yen from 64.70.

The trade weighted index was up to 68.72 at 5pm from 68.35 yesterday.

NZPA

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