The New Zealand dollar advanced as investors gained confidence that tensions in Ukraine were easing, stoking demand for risk-sensitive assets.
The kiwi rose as high as 84 US cents early this morning and was trading at 83.73 cents at 8am in Wellington, from 83.64 cents at 5pm yesterday. The trade-weighted index increased to 78.72 from 78.60 yesterday.
Global risk appetite returned after Russian president Vladimir Putin told a news conference he saw no need to use military force in Ukraine's Crimea region for now. The apparent easing of tensions pushed up European and US equities and US interest rates while damping demand for gold and oil.
"The New Zealand dollar is slightly stronger against the US dollar, helped by rebounding global risk appetite," Bank of New Zealand currency strategist Raiko Shareef said in a note. "With a dearth of data releases overnight, markets were driven mostly by developments in Ukraine. We remain cautious on this risk rally, as developments still have some way to run."
The New Zealand dollar advanced to 85.56 yen from 84.98 yen yesterday as investors reduced their holdings of the safe haven Japanese currency.