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NZ dollar peeks above US71c on risk appetite boost

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, July 9 NZPA - The New Zealand dollar peeked above US71c for the first time since late June as economic data from the United States and Australia restored faith in the global economic recovery and boosted appetite for higher-yielding currencies.

The kiwi spent the night in a range against the greenback between about US70.35c and the US71c level, and around 8am was at US70.95c.

The rise came after data showed new claims for US unemployment insurance fell more than expected last week and several top US retail chains reported stronger June same-store sales, supporting demand for stocks and other higher-risk assets.

A jump in Australian employment in June drove the Australian dollar up more than 1 percent on the day against the US dollar and nearly 2 percent higher against the yen.

Clarity on European bank stress tests helped financial stocks as investors saw criteria for the checks were no more onerous than markets expected.

The NZ dollar made small gains to 0.5583 euro at 8am from 0.5665 at 5pm yesterday, even as the European currency climbed to its highest level against the US dollar since mid-May around $US1.27.

The European Central Bank earlier kept interest rates at a record low 1 percent at its monthly meeting, with president Jean-Claude Trichet saying the economic recovery in the euro area continued in the first half of 2010.

The yen was one of the day's biggest losers as gains in European and US stocks prompted investors to shed long positions in the low-yielding currency. The NZ dollar was up to 62.72 yen at 8am from 62.20 at 5pm.

After yesterday falling to a two-week low against the Australian dollar around A80.5c on the strong jobs report across the Tasman, the kiwi was dragged out of the hole to be at A80.93c at today's local open.

The trade weighted index rose to 67.21 at 8am today from 66.91 at 5pm yesterday.

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