Currency: Dollar highest in six months

The New Zealand dollar reached its highest level in six months today and analysts think it may go higher.

By 5pm today, the NZ dollar was at US60.99c, having climbed as high as US61.12c today from US59.36c at 5pm on Friday.

A strong US equity market on Friday and weak US dollar were the main factors behind the rise.

"News of Bank of America being able to raise money without a government guarantee shows people are willing to lend," said Westpac senior market strategist Imre Speizer.

"It shows there is money around and it is willing to go into risk," he said.

The US dollar fell after a better-than-expected US jobs report bolstered hopes the global recession may be easing and dented safe-haven demand for the greenback.

Mr Speizer said it now looked like the US49c low in February was the bottom for the NZ dollar for a while.

He expects the currency to test US61.60c, and if it breaks that level a move to US65.50c is possible.

The Australian budget tomorrow was not seen as a big factor for traders as long as the sentiment remains positive.

ANZ said the "green shoots" thesis was dominating sentiment in the currency market.

Rankin Treasury also said green shoots were sprouting everywhere, but added there was a danger "that we read too much into the recent rallies, and assume happy days are here again".

Today the NZ dollar rose to A79.40c from A78.70c on Friday.

The NZ dollar also strengthened against the Japanese currency to be at 60.08 yen from 58.88 on Friday and it was 0.4470 euro from 0.4435. The trade weighted index rose to 59.15 from 58.20 on Friday.

Currency rates:

NZ dlr/US dlr US60.99c US59.36

NZ dlr/Aust dlr A79.40c A78.70c

NZ dlr/euro 0.4470 0.4435

NZ dlr/yen 60.08 58.88

NZ dlr/stg 40.08p 39.52p

NZ TWI 59.15 58.20

Aust dlr/US dlr 76.83c 75.42c

Euro/US dlr 1.3640 1.3388

US dlr/yen 98.45 99.20

- NZPA