Currency: Dollar up against greenback on Chinese news

The New Zealand dollar climbed through the night from a six-year low against the greenback as news out of China revived investors' risk appetite.

After dropping to around US49c yesterday afternoon, the kiwi rose as news about China's latest stimulus package and data suggesting its economy is beginning to recover eased risk aversion.

By 8am the NZ dollar was buying US50.45c, having topped US50.70c earlier in the morning, its highest level in about a week.

The Chinese news fuelled a rally in United States equities, lifting it from 12-year lows hit on Monday and prompted selling in the greenback versus the euro and other higher-yielding currencies such as the Australian and NZ dollars.

"The news of the stimulus package is supporting riskier currencies and generating an unwind in the safe-havens that is now more or less limited to the (US) dollar," said Robert Blake, senior currency strategist, at State Street Global Markets in Boston.
The NZ dollar edged down against its Australian counterpart after recovering from near seven-month lows on the back of weak Australian gross domestic product data yesterday.

During the night the kiwi reached around A78.35c but then slipped away to A77.88c about 8am.

The NZ dollar hit a week-high against the euro above 0.4015 early today, easing by the local open to 0.3999 from 0.3960 at 5pm yesterday.

The kiwi was up against the yen to 50.08 at 8am from 48.70 yen at 5pm. The trade weighted index was 52.07 at 8am from 51.46 at 5pm.

- NZPA