Dollar rises in thin holiday market

Wednesday 29th December 2010

The New Zealand dollar rose today on year-end position squaring.

The currency stepped up at one point late in morning trading but dealers said the move reflected flows in the thin holiday market. The currency then drifted higher in afternoon trading.

The NZ dollar was at US75.81c at 5pm from US75.47c at 8am and US74.77c at 5pm on Friday. It had risen to a three-week high of US76.09c overnight.

The New Zealand dollar was at A75.02c at 5pm from A74.73c at 8am and A74.53c at 5pm on Friday.

The Australian dollar was also firm today and dealers said firm commodity prices helped offset the impact of strength in US treasury yields, which make the US dollar more attractive.

Commodity based currencies were supported by a move by China to cut its export quotas for rare earth minerals by more than 11% in the first half of 2011, shrinking supplies of metals needed to make a range of high-tech products.

The US dollar was weak against the yen today on continuing doubts about the strength of the US economic recovery. Investors are cautious ahead of a business confidence indicator due tomorrow after the Conference Board measure of consumer confidence showed a drop in an index measure of confidence to 52.5 in December from a revised 54.3 in November.

The euro is also weak after the European Central Bank drained less money that it was intending to.

The NZ dollar was at 62.37 yen at 5pm today from 62.05 yen on Friday and at 0.5772 euro from 0.4844 euro on Friday.

The trade weighted index was at 68.29 from 67.53 on Friday.

NZPA

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