NZ dollar firms

NZPA

Friday 7th January 2011

The New Zealand dollar firmed overnight, even as the greenback continued to broadly outperform other currencies amid optimism about the United States economy.

At 8am today the kiwi was buying US75.87c, up from US75.68c at 5pm yesterday, and was at A76.09c against the Australian dollar from A75.90c.

The NZ dollar also rose to 0.5825 euro at 8am from 0.5759, and was up to 63.12 yen from 62.99 at 5pm, while the trade weighted index was 68.74 at 8am from 68.40 at 5pm.

BNZ currency strategist Mike Jones said there was little new information overnight to influence sentiment in currency markets.

The only real development of note was a late strengthening in the US dollar, triggered by a bout of euro selling against the greenback, Mr Jones said.

Gains by the NZ dollar against the euro, along with solid buying of the kiwi against the aussie from real money and short term speculative accounts, helped insulate the NZ currency from the broad firming in the US dollar.

Reuters reported that the euro tumbled to a five-week low against the US dollar and further losses were seen likely as a round of bond issues next week by peripheral euro zone economies raised concern about their high debt levels.

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