Currency: Kiwi steadies at US55c

The New Zealand dollar is holding firm around the US55c mark this morning, after reaching its highest levels in more than two months against the greenback, yen and Australian dollar early on Saturday.

While it then eased lower as the US dollar rebounded a little, investors remained fearful that the Federal Reserve's plans to buy long-term US government debt would erode the US currency.

By 8am today the kiwi was buying US55.78c, having peaked early Saturday around US56.25c.

Against the Japanese currency, the NZ dollar topped 53.90 yen before easing to 53.46 by today's local open, while against the aussie the kiwi got close to A81.50c then dipped to A81.19c by 8am.

The NZ dollar also topped 0.4135 euro, its highest in six weeks, before slipping to 0.4112 by the local open. The trade weighted index was 55.41 at 8am today from 55.13 at 5pm on Friday.

The Fed shocked financial markets last week when it said it would buy some US$1 trillion ($1.8 trillion) of government and mortgage-backed debt in a bid to cut interest rates and kick-start lending.

Anticipating an oversupply of US dollars, traders sold the greenback broadly, with the US currency notching its biggest weekly plunge since 1985.

ANZ bank expected the NZ dollar to start this week tentatively, with New Zealand economic data not due out until late in the week.

- NZPA