NZ dollar strong, despite earthquake

Photo / Dean Purcell

The New Zealand dollar opened strongly this morning after a better-than-expected US payrolls report, little affected by Saturday's massive Christchurch earthquake.

With the US non-farm payrolls release on Friday showing only 54,000 people lost their jobs in August, instead of the 100,000 predicted, risk appetite got a boost and the NZ dollar reached a high of US72.20c.

But the country was then shaken when Canterbury was hit by a magnitude 7.1 earthquake on Saturday at 4.35am, causing an estimated $2-billion worth of damage.

BNZ market strategist Mike Jones said considering the massive disaster, the earthquake had only a relatively minor effect on the currency.

"In fact, the NZ dollar/US dollar closed last week just a smidge below 3-1/2 week highs of US72.20c. However, with the full impact of the quake since having dawned on markets, the NZ dollar/US dollar has opened this morning 20 points lower around US71.80c," he said.

At 8am today, the NZ dollar was buying US71.83c, up from US71.40c at 5pm on Friday.

Against the Australian dollar, the kiwi was A78.48c from A78.58c on Friday, while it gained strength against the euro and yen.

It was buying 0.5573 euro this morning from 0.5566 at 5pm on Friday, and 60.42 yen from 60.12 yen.

The trade weighted index was 66.63 at 8am today from 66.45 Friday.

- NZPA