NZ dollar spikes above US72c

The New Zealand pushed briefly above US72c for the first time in two months as a strong start to the corporate earnings season in the United States drove risk appetite.

A surprise widening of the US trade deficit in May also weighed on the greenback.

At the same time, the euro hit a two-month high above US$1.27 after a smooth Greek treasury bill auction eased some concerns about Europe's debt crisis and took the sting out of another credit rating downgrade for Portugal.

Around 8am the kiwi was buying US71.84c, having peaked around US72.05c earlier in the morning. It had briefly dropped below US70.80c last night.

BNZ currency strategist Mike Jones said the fate of the NZ dollar continued to follow risk sentiment and global equity markets. US equity markets had rallied strongly as investors were encouraged by the positive earnings results.

The NZ dollar did spike overnight above 0.5670 euro, its highest level in two weeks, but by 8am today was at 0.5650, similar to its level at 5pm yesterday.

The kiwi also reached a two-week high against the Japanese currency, about 63.65 yen, and by the local open remained near that level having risen from around 63 yen at yesterday's local close.

Against the Australian dollar, the kiwi lifted from A81.50c at 5pm to peak at a one-week high above A81.70c, then eased to A81.62c by the local open.

The trade weighted index rose to 68.01 at 8am from 67.71 at 5pm.

- NZPA