The New Zealand dollar is heading for a 4.5 per cent quarterly gain against the euro as the unfolding woes across Europe emerge from the €10 billion ($15 billion) bailout for Cyprus, and as Italian politicians have still failed to cobble together a coalition Government since last month's election.
The kiwi traded near a seven-month high at €65.39c at 5pm Thursday from €65.20c on Wednesday. It fell to US83.56c from US83.75c on Wednesday, and is heading for a 1 per cent quarterly gain against the greenback.
Investors continue to spurn the eurozone after the latest lifeline thrown to Cyprus saw one major bank closed and left some deposit holders facing losses. The region has also fallen out of favour over the inability of Italian legislators to form a coalition Government.
"The UK and Europe are really struggling - austerity isn't working and it's going to be a long drawn-out struggle for them," said Dan Bell, currency strategist at HiFX in Auckland.
"Antipodean currencies and economies have a much more favourable profile any way you look at it - government debt to GDP, growth outlook, or export markets into Asia and emerging markets."
