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NZ Dollar Makes Recent Highs Vs Majors Then Falls Away

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 20 NZPA - The New Zealand dollar hit recent highs against major currencies early today before fading away.

Bank of New Zealand currency strategist Danica Hampton said that early in the offshore session, solid demand for NZ dollar crosses had squeezed the kiwi up against the greenback.

The NZ dollar climbed from near US77c early yesterday afternoon to around US77.75c around midnight -- its highest level in nearly a fortnight -- before falling away to US77.13c by 8am today.

The NZ dollar's strength against the greenback was short-lived, as a combination of a broad-based recovery in the United States dollar and lingering concerns about the health of the New Zealand economy knocked the kiwi from its highs, Ms Hampton said.

The kiwi also made it to a near two-week high against the yen, around 80.90, from 80.50 at 5pm yesterday. By 8am today the NZ dollar was down to 80.46 yen.

Ms Hampton said a solid performance from global equity markets had bolstered risk appetite and demand for the NZ dollar against the yen.

A near two-week high was also reached against the euro early today, at 0.4990, from 0.4961 at yesterday's local close. By the local open the kiwi was down to 0.4973 euro.

Against the Australian dollar, the kiwi was buying A80.96c at 8am from A80.99 at 5pm yesterday. The trade-weighted index was 68.89 at today's local open from 68.85.

The US dollar rebounded from a 2-1/2 week low against the euro as equities rallied and an economic forecasting gauge showed the US economy, while weak, has so far managed to avoid recession.

That eased fear about sagging consumer confidence and reassured investors that the Federal Reserve will have room to hike interest rates this year should record high oil prices put upward pressure on inflation.

NZPA WGT Reuters mjd kn

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