KEY POINTS:
The New Zealand dollar topped US75c overnight for the first time in nearly seven weeks, as the greenback fell to record lows.
The kiwi peaked against the US dollar at US75.24c around 7pm yesterday, then had a bumpy ride through the rest of the night. By 8am it
was buying US74.97c.
The greenback fought back from the lifetime troughs it hit against the euro and a basket of currencies after data showed an 8.3 per cent fall in new US homes sales in August, less than some commentators had been expecting.
Traders said the market is still convinced the US Federal Reserve will cut interest rates further at each of its remaining two meetings in 2007, despite data showing a modest slowdown in second-quarter growth and a relatively tight labour market.
Data showed the US economy grew at a revised annual rate of 3.8 per cent in the second quarter, down from earlier estimates of 4 per cent.
A separate report showed initial jobless claims fell steeply in the latest week.
Traders also said a rally in European stocks helped boost carry trades, which often involve using cheaply borrowed yen to buy higher-yielding currencies, such as the NZ dollar.
Against the Japanese currency, the kiwi briefly topped 87 yen around 7pm yesterday, the first time it has been above that level in more than six weeks. By 8am today the kiwi was buying 86.69 yen.
At the market's local open today it was also buying A85.15c against the Australian dollar, from A85.30c at 5pm yesterday.
Against the euro, the NZ dollar was at 0.5299 at 8am today, compared to 0.5290 at 5pm yesterday. The trade weighted index was 70.58 from 70.54.
Today traders will keenly watch New Zealand June quarter GDP data due at 10.45am, although as always, its historic nature means it can easily be shrugged off as dated.
Reuters currency rates:
8am today 5pm yesterday
NZ dlr/US dlr US74.97c US74.87c
NZ dlr/Aust dlr A85.15c A85.30c
NZ dlr/euro 0.5299 0.5290
NZ dlr/yen 86.69 86.49
NZ dlr/stg 37.01p 37.11p
NZ TWI 70.58 70.54
Australian dollar US88.04c US87.79c
Euro/US dollar 1.4147 1.4142
US dollar/yen 115.62 115.52
- NZPA