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Solid Demand Pushes NZ Dollar Up To US81c

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, March 19 NZPA - Solid demand for the New Zealand dollar saw the kiwi rise throughout yesterday and overnight from recent lows hit early yesterday.

By 8am today -- following the Federal Reserve's decision to slash the bellwether federal funds rate in the US by three-quarters of a percentage point down to 2.25 percent -- the kiwi was buying US81c.

It had climbed from a week-low against the greenback of US79.24c a little over 24 hours earlier, peaking at US81.15c early today.

From a seven-month low against the yen of 76.80 early yesterday, the kiwi had climbed to 80.20 yen by today's local open.

Similarly, against the euro it climbed from a four-month low around 0.5035 to 0.5154.

Against the Australian dollar, the kiwi was buying A87.29c at 8am, barely changed from A87.26c at 5pm yesterday. The trade weighted index was 71.70 from 70.88.

ANZ bank said the past 24 hours had seen a steady stream of buyers for the NZ dollar globally as risk aversion issues eased.

The Federal Reserve's decision should calm markets slightly ensuring the NZ dollar stabilised slightly from recent wild gyrations, ANZ said.

"Virtually a one way move for the NZD during the past 24 hours as yield attraction and local demand won the day."

The US dollar was extending gains against the yen in the wake of the Fed's decision to cut interest rates by 75 basis points, less than the market had expected. Earlier it had rebounded against the yen as stocks rallied and investors' appetite for risk revived.

The greenback also reversed earlier losses against the euro and gained against the single euro zone currency after the Fed cut.

Overnight the greenback had traded near record lows against the euro, amid expectations the Fed would make a cut of at least 100 basis points.

NZPA WGT Reuters mjd nb

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