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NZ Dollar Rescales US76c

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 20 NZPA - The New Zealand dollar rescaled US76c today even as the greenback strengthened against the euro.

It closed on US76.12c after opening at US76.28c and compared with US75.86c at 4.30pm yesterday.

The kiwi's rise has been in spite of falls in equity markets. Such falls can curb investors' appetite for risk and their demand for carry trades, which involve selling low-yielding currencies such as the yen to buy higher yielding currencies such as the kiwi.

Bank of New Zealand currency strategist Danica Hampton said there were rumours during the New York session of "huge" NZ dollar buying from an Australian bank.

ANZ Bank chief dealer in New Zealand Murray Hindley said the kiwi's rise was due to the high yielding stocks coming back into fashion and a short squeeze in a thin market.

The rise of the greenback against the euro, was helped by a sharp drop in crude oil prices and a surge in British retail sales that caused traders to offload the European single currency to buy sterling.

Against the Australian dollar, the kiwi closed unchanged on A80.07c from yesterday while the trade weighted index ended the week on 68.33 from 68.05 yesterday.

Some analysts believe the aussie will underperform other commodity stocks because of a gas explosion in Perth that will interrupt growth in the resource rich western state.

Mr Hindley said the local market will be focussed on trade, current account and GDP data next week.

Economists on average are forecasting the economy contracted by 0.3 percent in the first quarter and a number below that figure would see the kiwi sold.

The current account deficit is picked to be $1.7 billion in the quarter and $13.2 billion for the year. A trade surplus of $200 million is forecast for May.

For the dollar, a meeting on Sunday in Saudi Arabia between consumers and producers to discuss rising oil prices will be a focal point ahead of the US Federal Reserve's two-day policy meeting that starts next Tuesday, market players said.

NZPA WGT sml mgr

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