NZ dollar drives up to post-float levels again

Friday 8th July 2011

The New Zealand dollar pushed back up to post-float high levels against the greenback as investors became more confident about putting money into riskier assets.

World stocks hit five-week highs as encouraging data on US private sector hiring boosted optimism about the economy, while oil prices gained their most in two months on strong fuel demand.

The euro rose against the US dollar for the first time in three sessions after European Central Bank President Jean-Claude Trichet said the bank would relax rules and keep providing liquidity to struggling Portugal, allaying worries about Europe's debt crisis.

The New Zealand dollar climbed throughout the early morning hours from around US82.70c shortly after midnight to be around highs at US83.32c by 8am.

ANZ said that despite a shaky start yesterday, the NZ dollar had recovered completely and followed Australian dollar moves overnight.

Having spent much of the week consolidating, the NZ dollar was now in a position where it could break new ground, providing United States June non-farm payrolls data tonight was strong.

Interest in the Australian dollar was buoyed after stronger than expected jobs data yesterday.

When the Australian jobs figures came out the NZ dollar had initially dived below A76.90c, but since then the kiwi has rebuilt and by 8am was back to A77.36c, around the level it was at before the plunge.

The NZ dollar also peaked around 0.5815 euro shortly after midnight, the highest level in nearly six months, after the European Central Bank raised its benchmark interest rate quarter of a percentage point to 1.5 percent, as widely expected. By 8am the kiwi was at 0.5805 euro.

The NZ dollar was at 67.67 yen at 8am from 66.95 at 5pm, while the trade weighted index was up to 71.88 from 71.42.

NZPA

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