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NZ Dollar Tops US61c But Then Falls Quickly

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 21 NZPA - The New Zealand dollar climbed to its highest level against the greenback in more than a week above US61c early today but then lost much of its overnight gains.

The kiwi peaked at US61.13c around 2am, according to Reuters data, but by 8am was down to US60.52c, although still well above the US60.04c at 5pm yesterday.

The US dollar fell to its lowest in nearly five months against the euro and a basket of currencies as the view that the worst of the global slump may be over dented the greenback's safe haven appeal.

BNZ Capital currency strategist Danica Hampton said risk appetite was in fine fettle.

Last night it was once again a rally by the British pound that dragged currencies along in its wake, with the euro and NZ dollar "keen followers of fashion", she said.

The kiwi returned early today to the week-high against the European currency also reached about 24 hours earlier of 0.4445 euro, but then tumbled to 0.4396 euro by the local open, below the 0.4410 at 5pm.

The NZ dollar was down to 57.34 yen at the local open from 57.50 at 5pm, but edged up against the Australian dollar to A78.07c at 8am from A77.80c. The trade weighted index was up slightly to 57.93 at 8am from 57.87 at 5pm.

Generally, investors' appetite for risk improved following a successful share offering from Bank of America and after US Treasury Secretary Timothy Geithner said the financial system was "starting to heal" thanks to the government's bailout efforts.

The greenback extended declines after minutes of the Federal Reserve's latest policy meeting showed the central bank considered increasing purchases of securities, a move that would debase the world's reserve currency.

NZPA WGT Reuters mjd nb

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