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Kiwi Maintains Momentum On US Weakness

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 19 NZPA - The New Zealand dollar maintained much of the momentum it gained offshore on Friday , thanks to US dollar weakness and a firmer Australian currency.

The kiwi kicked off the morning on a high of US77.48c before hitting a spot of profit-taking and drifting to a close of US77.21c.

It was a healthy rise compared with a near-four month low around US75.35c on Thursday night and Friday's close of US76.47c.

Meanwhile, the Australia dollar hit a 24-year peak of around US95.81c before trimming its gains to US95.33c.

Against its resources-rich neighbour, the kiwi c losed just under the day's high of A81c.

The trade-weighted index rose to 68.85 from 68.45.

Westpac currency analyst Michael Gordon noted the (kiwi-aussie) cross had slipped to its lowest level since August 2006 last week around A80.60c , and that trend was expected to continue as some began to speculate about the Australian dollar reaching parity with the US.

Friday night's weak greenback was sparked by a negative University of Michigan consumer confidence index, which dropped to its lowest level since June 1980.

Today the US dollar began to recover against the yen , an d Mr Gordon said the markets were reacting to mixed data after a run of better than expected economic news.

"The US dollar's been responding more to the weaker stuff than the stronger numbers which I think suggests the speculative community has got long the US dollar and is getting a bit nervous."

Local markets this week are looking to a Government budget on Thursday with expectations of personal tax cuts.

NZPA WGT cch kk

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