NZ dollar strengthens overnight

The New Zealand dollar strengthened overnight even as market anxiety rose and investor risk appetite wobbled.

By 8am the NZ dollar was buying US69.79c, having ranged between about US69.30c and US70c overnight.

BNZ strategist Mike Jones said global equity markets and investor sentiment remained the main driver of the NZ dollar.

The euro retreated against the greenback after a Spanish newspaper reported that the European Union, International Monetary Fund and US Treasury were drawing up an emergency credit line for Spain.

The European Commission rejected the report, but the premium investors demand to hold 10-year Spanish bonds over German bunds hit the highest level in the euro's 11-year history.

Data showing US housing starts plunged in May to their lowest level in five months also weighed on the euro, though stronger-than-expected industrial production data kept losses in check.

The NZ dollar lifted to 0.5673 euro at 8am from 0.5638 at 5pm yesterday, with the kiwi also edging up to 63.79 yen from 63.56.

Against the Australian dollar, the kiwi was buying A80.85c at 8am, having climbed from a fortnight low around A80.20c at 6pm yesterday. The trade weighted index rose to 67.39 at 8am from 67.10 at 5pm.

- NZPA