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NZ dollar lifts to week high vs greenback, yen

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 11 NZPA - A New Zealand dollar buoyed by yesterday's interest rate rise received further impetus overnight as risk assets regained popularity among investors.

By 8am today the kiwi was around a one-week peak against the greenback and yen, buying US68.74c and 62.74 yen, up from US67.80c and 61.81 yen at 5pm yesterday.

In its morning briefing notes, ANZ bank said that following the Reserve Bank's decision to lift the official cash rate 25 basis points, the NZ dollar was given another lift overnight as stocks surged higher on the back of robust strength in Chinese exports.

Investors were cheered when China confirmed exports jumped 48.5 percent in the 12 months to May, easing concern that Europe's debt woes would hurt the global economy.

ANZ said risk assets were back in favour, with last week's concerns seemingly a thing of the past.

"Equities and commodities performed well and measures of risk aversion have eased, with strong Chinese export growth the latest indicator reassuring investors about the health of the global recovery."

But it also warned that with the global recovery far from assured, more volatility should be expected.

The NZ dollar peaked overnight near 0.5675 euro, its highest level against the European currency in three weeks. By 8am the kiwi was at 0.5663 euro from 0.5627 at 5pm.

The euro rose against the US dollar partly because strong demand for Spanish bonds eased concern about the country's ability to finance its debt.

Investors also breathed a sigh of relief after European Central Bank President Jean-Claude Trichet said three-month emergency loans to banks would continue until September and when Germany's high court rejected efforts to block German guarantees for euro zone financial aid.

Against the Australian dollar, the kiwi opened locally at A80.85c, little changed from its 5pm level, while the trade weighted index lifted to 66.86 at 8am from 66.32 at 5pm.

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