NZ dollar touches 8-month high vs US

Photo / Dean Purcell

The New Zealand dollar pushed to an eight-month high against a broadly falling greenback, as markets braced for more monetary easing from the United States Federal Reserve.

The kiwi was also boosted by reported comments from NZ Debt Management Office treasurer Philip Combes, at a conference in London, that the NZ dollar had room to appreciate in the medium term provided Asian economic growth continued and commodity prices stayed strong.

The kiwi peaked around US74.15c shortly before 2am, but fell away quickly and by 8am had eased to US73.76c. That was still up from the US73.59c at 5pm yesterday.

The US dollar also slid to a five-month trough against the euro and saw its lowest level against the yen since Japan's intervention last week.

The Fed said yesterday it was prepared to start pumping billions of new dollars into the US economy, likely via purchases of Treasury bonds, to boost growth if necessary. That would further depress US debt yields, which are already at record lows in some maturities, and weaken demand for US assets.

BNZ markets strategist Mike Jones said New Zealand June quarter GDP figures to be published today would help determine whether the kiwi could hold onto its recent gains against the greenback.

The NZ dollar dragged itself back to A77.21c against the Australian dollar at 8am from A76.94c at 5pm, as it struggled away from a five-month low around A76.70c yesterday morning.

The kiwi slipped to 0.5507 euro at 8am from 0.5537 at 5pm and eased to 62.35 yen from 62.45. The trade weighted index was down to 67.02 at 8am from 67.08 at 5pm.

- NZPA