NZ dollar gains against greenback

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The New Zealand dollar rose against the greenback after a bounce in global equities saw increased demand for high yielding currencies such as the New Zealand dollar.

Sentiment on Wall Street and in Europe rose overnight amid hopes that Greece's parliament will approve a package of austerity measures needed if the heavily indebted country is to avoid a default on its sovereign debt repayments.

That saw stocks reverse their recent run of declines, with the Standard & Poor's 500 Index closing 0.9 per cent higher at 1,280.09, while Europe's Stoxx 600 eked out a gain of 0.1 per cent to close at 264.01.

The "risk on" mood saw increased demand for growth-linked currencies such as the kiwi dollar.

The currency's upward momentum was capped by a fall in commodities which slipped lower despite signs that oil prices were stabilising. The Thomson Reuters Jefferies CRB Index, a measure of 19 hard and soft commodities, fell 0.3 per cent to a fresh four month low of 328.75.

"Risk sentiment rose overnight, but it's optimism founded on liquefaction," said Alex Sinton, a senior dealer at ANZ New Zealand.

"Even if they do pass the measure and there is a plan B, and European banks rollover the debt, it's still a pretty aggressive austerity package."

The kiwi recently traded at 80.54 US cents, up from 80.32 cents yesterday, and gained to 70.03 on the trade-weighted index of major trading partners' currencies from 69.95.

It rose to 77.13 Australian cents from 76.91 cents yesterday, and gained to 65.14 yen from 64.85 yen.

It fell to 56.37 euro cents from 56.62 cents yesterday, and was little changed at 50.38 pence from 50.34 pence previously.

The kiwi may trade between a range of 80.25 US cents and 80.94 cents, Sinton said, with the bias to the upside.