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NZ Dollar Firms Against Greenback On Growing Risk Tolerance

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, April 3 NZPA - The New Zealand dollar firmed against the greenback and yen overnight as investors, betting the worst of the credit crisis may be over, grow more tolerant of risk.

By 8am today, the kiwi was buying US79c, having peaked earlier around US79.25c from US78.82c at 5pm yesterday.

"Risk plays are being put back on," said Ron Simpson, director of currency research at Action Economics in Tampa, Florida. "A little bit of fear has gone out of the market."

The ANZ bank said an in-demand NZ dollar was lifted in the local session yesterday by a steady stream of buyers, particularly against the Australian dollar.

Overnight, moves back above US79c had begun to add to returning positive sentiment, with a varied array of demand from most quarters for the kiwi helped by a slightly weaker US dollar, ANZ said.

Against the yen, the NZ dollar was up to 80.85 at today's local open from 80.25 at 5pm yesterday.

It slipped against the Australian dollar and the euro, to be buying A86.31c at 8am from A86.73c at yesterday's local close and 0.5042 euro from 0.5053. The trade weighted index was 70.61 at 8am from 70.58.

The rise in risk tolerance saw the US dollar lift against the yen.

Congressional testimony by Federal Reserve chairman Ben Bernanke caused some volatility initially, but his comments were largely taken as positive. While the US economy could face a mild recession in the first half of 2008, he said growth should pick up as the impact of aggressive interest rate cuts were felt.

NZPA WGT Reuters mjd nb

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