Dollar at 27-month high vs US

Photo / Dean Purcell

The New Zealand dollar has raced to its highest level against the US dollar in 27 months, ahead of a big week in the United States.

From its lowest level against the greenback in three weeks last Wednesday, near US74c, the kiwi peaked around US76.65c on Saturday morning. By 8am today the NZ dollar was at US76.54c, up from US75.34c at 5pm on Friday.

Signals emanating from the currency options market at the end of last week were flagging concern about this week's events in the United States, including mid-term elections, another round of quantitative easing expected from the Federal Reserve, and the non-farm payrolls report for October.

ANZ bank said the NZ dollar had a very solid finish to last week, particularly during the last 30 minutes of trading.

Illiquidity in the offshore market helped see it push higher and close marginally above the key US76.44c level.

A new-found freedom may overcome the NZ dollar this week, following the break above that key resistance level. The kiwi would remain in the spotlight during the week with plenty of offshore interest as a visit by US Secretary of State Hillary Clinton would draw attention to the relative attractiveness of the currency and country, ANZ said.

The NZ dollar also pushed up to its highest level against the Australian dollar in six weeks, topping A78c early on Saturday. At 8am today the kiwi was at A77.72c from A77.15c at 5pm on Friday.

BNZ markets strategist Mike Jones pointed to factors supporting the NZ dollar against the aussie, including the NZ Reserve Bank's reiteration of a clear tightening bias, and Australia's relatively benign third quarter inflation data.

The NZ dollar was also up to 0.5480 euro at 8am today from 0.5420 at 5pm on Friday, and rose to 61.46 yen from 60.70. The trade weighted index was up to 67.67 from 66.92.

- NZPA