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NZ Dollar Continues Climb Against US Dollar

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, March 23 NZPA - The New Zealand dollar was again carried along by last week's moves by the United States Federal Reserve, climbing against Uncle Sam's dollar woes.

The kiwi was worth US56.52c at 5pm today, up from US55.78c at 8am.

It also climbed steadily against the euro and Japanese yen.

The dollar's adventures today were a continuation of last week's US Federal Reserve shock announcement, said BNZ currency strategist Danica Hampton.

The Fed said it would buy some $US1 trillion ($NZ1.8 trillion) of government and mortgage-backed debt in a bid to cut interest rates and kick-start lending. Anticipating an oversupply of US dollars, traders sold the greenback broadly, with the US currency notching its biggest weekly plunge since 1985.

Ms Hampton said the key driver this week would be seeing where the risk appetite and US sentiment would go. "We have seen a weaker USD dominate markets over the past three days. We did see a little bit of profit taking into the weekend as people just pared back those positions and took a little bit of risk off the table and saw the currency falling a little into the closing of the New York session."

The kiwi had three days of very solid gains and it did look as if the bounce could have been exhausted. It could experience a little bit of a pull back at some point this week but the dips would be limited between the US53.5c and US54c mark, she said.

At 5pm today the kiwi was worth A81.10c, up from A81.06c at 5pm on Friday.

It bought 0.4136 euro, up from 0.4078, was buying 54.45 Japanese yen, up from 52.71, and buying 38.94 British pence, up from 38.48.

The trade weighted index stood at 55.88, up from 55.13.

Meanwhile, in overseas foreign exchanges, the euro rose to its highest in five months against the yen on Monday, finding favour from a poor outlook for Japan's economy and concerns about erosion of the dollar from the Federal Reserve plan.

The euro rose 1 percent to 131.32 yen, touching its highest since late October at 131.36 yen on trading platform EBS.

The US dollar was steady at 96.09 yen after falling steeply last week.

The euro gained 0.6 percent to $US1.3662, after hitting a 2-month high at $US1.3739 on EBS last week.

NZPA WGT Reuters dw nb

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