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NZ Dollar Rises Against Weakening Greenback

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 22 NZPA - The New Zealand dollar rose today as the US dollar fell on worries about the US government's credit worthiness.

By 5pm the NZ dollar was buying US61.48c, up from US60.85c at the same time yesterday, and up from US60.20c on Thursday night.

The high today around US61.76c was the highest since October last year.

The US dollar plunged to its lowest level this year against a currency basket, while the euro pulled back from near a five-month high above $US1.39.

Markets are beginning to anticipate the possibility of a downgrade of the US's AAA credit rating after Standard and Poor's said the UK may lose its AAA rating.

The statement initially hit the pound but sparked broad selling of US stocks, bonds and the currency on worries that US may be next.

Any country whose government debt burden is approaching 100 percent of gross domestic product was seen as at risk.

BNZ Capital currency strategist Danica Hampton said the sentiment for a weaker US dollar continued to dominate foreign exchange markets.

"The NZ dollar and Australian dollar batted on strongly today as the US dollar got thumped," ANZ said.

The NZ dollar was buying 0.4415 euros at 5pm, little changed from 0.4416 yesterday, and rose to 57.90 yen from 57.50.

Against the Australian dollar, the NZ dollar rose to A78.95c from A78.43c yesterday, while the trade weighted index rose to 58.52 from 58.21.

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