NZ dollar regains lost ground vs greenback

The New Zealand dollar regained lost ground against the greenback and strengthened against the euro, as the European currency declined on concerns peripheral euro zone economies could face debt problems similar to those of Greece.

Around 8am the kiwi was buying US70.30c, having 45 minutes earlier equalled the two-week high US70.36c level reached early yesterday, according to Reuters data. The NZ dollar had dropped towards US69.60c early today but then climbed out of the hole.

Against the European currency the NZ dollar rose from around 0.5130 about 11pm to be around week high levels at 0.5170, by the local open, not far off its two-year peak.

BNZ strategist Mike Jones said the NZ dollar had taken its cues from offshore, particularly the sharply weaker euro and British pound.

The losses by the pound and euro had dragged the NZ dollar down against the United States dollar during the night, but solid demand for the kiwi, combined with a late rally in commodity prices, helped the NZ dollar recoup its losses against the greenback, said Jones.

Around 8am the kiwi was up to 46.90p, near last week's post-float high. Jones said ratings agency Fitch had said Britain's credit profile had deteriorated and it was uncomfortable with the British fiscal position.

The NZ dollar gained overnight to 63.29 yen at 8am from 62.92 at the local close, despite the safe-haven Japanese currency gaining broadly as Japanese corporates took money back home in the run-up to the March 31 fiscal year-end.

The trade weighted index rose to 65.00 at 8am from 64.65 at 5pm.

- NZPA