Currency: Kiwi looks sure to rise

The New Zealand dollar closed on its highs, and looked sure to rise again overnight.

At 5pm the kiwi traded at US42.05c, up 20 points from its close Wednesday night of US41.82c, while the aussie was at US51.66c, up from US51.36c on Wednesday.

"(Kiwi) is closing at its US42c level, which is slightly higher than its opening level. We've had a range of US41.92/42.08c," one local dealer said.

"We've seen in the last few days it's been underpinned by some sort of transactional flow, and that seems to be carrying on again.

"It looks as though the kiwi's going to be quite underpinned (overnight), so there's a reasonable chance it will move up into the US42.20c level at some point, and the downside should be US41.90c," he said.

A strong local business confidence survey and an upbeat speech by United States Federal Reserve Chairman Alan Greenspan provided some fuel overnight.

"I think the aussie might have jumped briefly on (Greenspan) but the kiwi's had its own little thing going on - no-one's too interested in the economics, more in just general flows in the market at this stage," the dealer said.

Domestic data out yesterday included an increase in the producer price index - 2.6 per cent ahead of a year earlier - and a rise in the January trade deficit to the largest in three years ($245 million).

On the crosses at 5pm, the kiwi traded at A81.39c (A81.41c at Wednesday's close), while the aussie was buying $NZ1.2286 ($NZ1.2280).

Against the other major currencies the kiwi was steady at 56.31 yen, 29.63 pence (29.54), 0.7175 Swiss francs (0.7146), and 0.4860 euro (0.4839).

The trade weighted index was at 51.35 (51.22), the monetary conditions index was at minus 732 (minus 744), and 90-day bank bills were at 4.97 per cent (4.98).

On the debt market, the March 2002 bonds were unchanged at 4.74 per cent, the April 2004 bonds were at 5.76 percent (5.81), the November 2006s were at 6.33 per cent (6.41), and the November 2011s were at 6.58 per cent (6.66).

- NZPA