NZ dollar at two-year high vs euro

The New Zealand dollar climbed to a new two-year high against the euro, after a rating downgrade for Portugal added to worries about debt levels and growth in the euro zone's smaller countries, and pushed the European currency down.

By 8am today the kiwi was buying 0.5271 euro, up from 0.5230 euro at 5pm yesterday.

The NZ dollar also rose against the Australian and Japanese currencies but failed to make headway against the greenback, which rose broadly.

United States reports on new orders for manufactured goods and housing data were mixed, but analysts said the lacklustre figures would not prevent investors from buying more US dollars.

"Sovereign credit worries in Europe and Japan are leading to some general risk aversion," said Michael Malpede, a market analyst at Easy Forex in Chicago.

The NZ dollar was at US70.31c at the local open, little changed from its level at 5pm yesterday of US70.37c after the kiwi slipped yesterday on weaker than expected current account data.

Against the aussie the kiwi rose to A77.37c at 8am from A76.73c at the local close, which was near its lowest level in more than a week. The NZ dollar was also up to 64.74 yen at the local open from 63.67.

The trade weighted index lifted to 65.68 at 8am from 65.28 at 5pm.

ANZ said December quarter gross domestic product data, due out at 10.45am today, was likely to help underpin the NZ dollar against a backdrop of US dollar strength. But should the figures come in below expectations further dips below US70c would take place.

- NZPA