Kiwi climbs out of dip

Wednesday 18th May 2011

The New Zealand dollar found enough support to climb out of a dip, as a late pick-up in the euro brought commodities off earlier lows and stocks in the United States regained some lost ground.

At 8am the kiwi was buying US78.39c, having dropped to around US77.65c early today from US78.18c at 5pm yesterday. The NZ dollar also edged lower to 0.5510 euro.

ANZ bank said the ceiling continued to be lowered on the NZ dollar ahead of tomorrow's eagerly awaited budget. Market participants continued to be happy to sell on any rallies as commodity prices eased lower.

Fonterra's online auction early today helped cap the topside, with weighted average prices falling 1.1%, ANZ said.

Westpac senior market strategist Imre Speizer said the US dollar index ranged sideways in the overnight session.

The euro was also directionless, although rebounding late in the session, with its earlier weakness possibly influenced by European finance ministers finally admitting last year's rescue package had failed and agreeing a debt restructure was needed.

The Australian dollar had been volatile but directionless, Speizer said.

The NZ dollar stayed in a narrow range against the aussie overnight and was buying A73.80c at 8am, the same as at 5pm, while the kiwi rose to 63.78 yen from 63.43. The trade weighted index was 67.94 at 8am from 67.85 at 5pm.

NZPA

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