Dollar dips against euro after Greek aid approved

The New Zealand dollar was stronger against the greenback and yen, but weaker against the euro after the European Union and IMF carved out an emergency loan package of up to 750 billion euros to keep Greece's debt crisis from spreading through the euro zone.

The size of the package and an unexpected pledge by the European Central Bank to buy euro zone bonds, if needed, gave investors some confidence to return to riskier assets.

It promoted short covering in currencies that had been under pressure last week. The euro jumped and stock markets rallied.

By 5pm today the NZ dollar was buying US72.14c, little changed from US72.04c at 8am, which was up from US71.16c at 5pm on Friday.

It rose to 66.84 yen from 65.56 at 5pm on Friday. It was down to 0.5582 euro from 0.5603 at 5pm on Friday.

One of the ironies of the financial market disruptions last week was that it occurred just when a lot of the economic data had been looking better globally, BNZ said in a market outlook.

The global financial story is expected to dominate markets again this week with only minor economic reports due locally. The Australian federal budget on Tuesday will also be watched by investors.

Against the Australian dollar, the NZ dollar was at A79.95c at 5pm today from A79.94c at 5pm on Friday, while the trade weighted index lifted to 68.20 at 5pm from 67.76.

- NZPA