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NZ Dollar Peaks At Near 10-Month High Vs Greenback

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, July 29 NZPA - The New Zealand dollar peaked at its highest level against the greenback in nearly 10 months but fell away rapidly as consumer confidence in the United States weakened on a worsening job market.

Rekindled worries about the stability of the US economy's recovery increased safe-haven demand for the greenback.

"We've had a nearly two-week run-up in stocks and a flight into riskier currencies. Markets are kind of technically overbought in terms of risk and due for a bounce," said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Connecticut. The NZ dollar raced up in the five hours to 8pm from around US65.35c to peak at US66.33c, according to Reuters data. It then started to fall and by 8am was down to US65.90c.

ANZ bank said a speech late yesterday afternoon by Reserve Bank of Australia Governor Glenn Stevens inspired the Australian dollar to spike, "reluctantly" dragging the NZ dollar with it before offshore selling overnight.

In an upbeat speech, Mr Stevens said the risks to the Australian economy were now more balanced, and that low rates could inflate a housing bubble.

More broadly, the greenback rose from its lowest level of the year against a currency basket, while the yen also rallied across the board as investors dumped riskier assets.

The NZ dollar got close to 63.10 yen around 8pm, its highest level in nearly seven weeks, then fell away to be at 62.41 yen at today's local open.

Early today the kiwi reached an 8-1/2-month high at 0.4659 euros, and by 8am had eased just slightly to 0.4649 from 0.4623 at 5pm yesterday.

Against the Australian dollar the kiwi was little changed from yesterday's local close, buying A79.55 at the local open. The trade weighted index lifted to 61.57 at 8am from 61.44 at 5pm.

NZPA

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