NZ dollar stays close to post-float high

Friday 1st July 2011

The New Zealand dollar managed to stay close to the post-float high against the greenback reached yesterday afternoon, as investors remained keen on risk after Greece approved detailed austerity and privatisation bills.

Around 8am today the NZ dollar was buying US82.83c, after getting close to US83.20c shortly after 3pm yesterday -- the kiwi's highest level since it was floated in 1985.

ANZ said markets had an air of uncertainty this morning after the NZ dollar had gained nearly 3c against the US dollar in two days.

Yesterday the kiwi had rallied to new highs after the austerity measures in Greece snuck through and New Zealand business confidence showed positive signs. Overnight, it had settled just south of US83c.

"Be wary of less positive news rocking the kiwi's precarious perch," ANZ cautioned.

Thin markets were on the horizon with a long weekend ahead for the US which had a holiday on Monday.

The NZ dollar was little changed at 8am from its 5pm level against the Australian and Japanese currencies, at A77.21c and 66.67 yen.

The kiwi edged lower to 0.5709 euro at 8am from 0.5722 at 5pm, while the trade weighted index was down to 71.19 from 71.29.

The euro climbed to a three-week high against the US dollar as Greece passed the crucial bills to avert immediate default and on expectations that euro-zone interest rates will rise again next week.

But analysts said longer term dangers still lurked with credit insurance markets pricing in an 80 percent chance of Greece defaulting within five years.

"While much uncertainty about the outlook for Greece remains, the euro should enjoy additional near term gains on the notion that imminent default is likely to be avoided," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

NZPA

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