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Further Gains For NZ Dollar Against Greenback

Fuseworks Media
Fuseworks Media

Wellington, May 20 NZPA - The New Zealand dollar peaked at its highest level against the greenback in nearly a week as the United States currency weakened on growing optimism the global recession is moderating.

By 8am the kiwi was buying US60.18c, having peaked around US60.60c overnight from US59.71c at 5pm yesterday.

BNZ Capital currency strategist Danica Hampton said once again the NZ dollar's rate against the greenback had tailed the Australian dollar and the British pound on their paths higher.

The appetite for investment in risk sensitive currencies could be seen by rekindled interest in NZ dollar uridashi bonds, she said.

ANZ said some corrections for the NZ dollar from current levels should not come as a surprise, given the relative ease of the move higher.

"Consider much of the work that the NZD is undertaking to be base building for a move higher," ANZ said.

Against the Australian dollar the kiwi dropped to near three-week lows at A77.50c, and by 8am was at A77.63c from A77.87c at 5pm.

The NZ dollar edged up to 0.4413 euro at the local open from 0.4402 at 5pm, and rose to 57.80 yen from 57.57. The trade weighted index was 57.95 at 8am from 57.78 at 5pm.

The euro gained against the greenback as German data showed investors and analysts grew much more optimistic in May that economic conditions will be better late this year.

Losses in the US dollar, which is seen as a safe haven, were limited by a government report showing US housing starts and permits unexpectedly fell to record lows last month.

NZPA WGT Reuters mjd gt

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