Kiwi peaks around US75.75c

Monday 28th March 2011

The New Zealand dollar peaked at a one-month high against the greenback early on Saturday as investors became less averse to risk.

The kiwi got to around US75.75c, its highest level since February 22 - the day a devastating earthquake hit Christchurch. By 8am today the NZ dollar had fallen back to US75.21c but was still above the US74.85c at 5pm on Friday.

The New Zealand currency has climbed steadily since dropping to a 6-1/2-month low against the US dollar around US71.15c on March 17.

ANZ bank said an explosive NZ dollar had punched through further topside levels in the overnight Friday session off the back of reinsurance flows seen globally. A stronger Australian dollar supported the move as it hit a post-float high against the US dollar.

Solid demand for the NZ dollar had the potential to see it back to levels last seen before last month's Christchurch earthquake, ANZ said.

The US dollar climbed against the euro after a Federal Reserve official said the central bank would have to tighten monetary policy soon to avoid sowing the seeds of inflation.

Speaking in New York, Philadelphia Federal Reserve Bank President Charles Plosser said consumer spending continued to expand at a "reasonably robust pace" and the labour market was improving. The overall economy, he said, has gained "significant strength and momentum" since the summer.

The NZ dollar was up to 0.5361 at 8am today from 0.5282 at 5pm on Friday, and rose to 61.26 yen from 60.61. It was little changed at A73.33c against the aussie, while the trade weighted index rose to 66 at 8am today from 65.53 at 5pm on Friday.

NZPA

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