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NZ Dollar Makes Up Lost Ground Against Greenback, Then Loses It

Fuseworks Media
Fuseworks Media

Wellington, May 1 NZPA - Early in the overnight session, the New Zealand dollar made up the ground it lost after yesterday's interest rate announcement, only to lose it all again as the night wore on.

The kiwi topped US57.50c around 8pm, but then fell away in a series of jerky steps to be at US56.55c at 8am -- the same level it started from at 5pm yesterday.

BNZ Capital currency strategist Danica Hampton said better-than-expected Japanese industrial production and strong gains across Asian and European equities bolstered risk appetite and demand for growth sensitive currencies such as the NZ dollar.

But the kiwi backed off its highs through the New York session as United States equities remained flat while investors digested Chrysler's bankruptcy filing, Ms Hampton said.

Also much anticipated month-end demand for the NZ dollar was not quite as strong as traders had expected.

The NZ dollar lifted to 0.4276 euro at the local open from 0.4257 at 5pm, and was up to 55.77 yen from 55.07.

Against the Australian dollar the kiwi was little changed at A77.85c by 8am, while the trade weighted index lifted to 56.04 at 8am from 55.89 at 5pm.

The US dollar rose against the yen and euro as investors rebalanced their portfolios as April ended and trading thinned heading into the May Day holiday in Europe.

Better-than-expected US corporate earnings, which helped put the benchmark S&P 500 on track for its best month since 1991, boosted market optimism, lifting higher-yield currencies.

NZPA WGT Reuters mjd nb

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