Kiwi rises to post-float record, then drifts back

Monday 30th May 2011

The New Zealand dollar broke through to a new post-float high today but could not maintain the level and drifted back.

The NZ dollar traded to US82.16c in late morning trading, which is the highest level since it was set free in March 1985. The previous post-float high was US82.15c.

The breach was expected as the NZ dollar was well-bid last week on speculation of Chinese investment in this country and the US dollar has been under pressure from ongoing doubts about the performance of the United States economy.

Imre Speizer, senior strategist at Westpac, said the move came about 25 minutes after stronger than expected trade data was released this morning.

Exports were 17% higher than a year earlier at a new high at $4.7 billion in April, while imports lifted 7.2% to $3.5 billion, Statistics New Zealand (SNZ) said today. The milk powder, butter and cheese grouping recorded a 32% rise.

The NZ dollar was at US81.63c at 5pm from US81.93c at 8am and US81.69c at 5pm on Friday.

"The NZ dollar and Australian dollar are travelling very comfortably in the fast lane on which there seems to be no speed limit or any other major restriction to impede progress," Rankin Treasury said.

"Meanwhile, in the slow lane, are the US dollar, euro and yen which are spluttering, stopping and starting as they navigate a multiplicity of roadblocks and blind exits."

International markets are expected to be subdued overnight as the US market is closed for Memorial Day, while tomorrow the National Bank business confidence survey may be a focus.

The NZ dollar was at A76.37c at 5pm, little changed from last Friday.

The NZ dollar was at 0.5726 euro from 0.5732 euro on Friday and at 65.94 yen from 66.21 yen on Friday.

The trade weighted index was at 70.55 at 5pm from 70.57 on Friday.

NZPA

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