Dollar eases after rising toward US75c

The New Zealand dollar spent most of today regrouping at slightly lower levels after rising to within a whisker of US75c as a surprise easing by the Bank of Japan rekindled risk appetite and prompted buying of currencies and assets with higher returns.

The NZ dollar was at US74.81c at 5pm from US74.88c at 8am and US73.93c at 5pm yesterday. It peaked at US74.97c at around 7am.

The Bank of Japan cut its overnight rate target, and the US dollar fell to an eight-month low against the euro. The move boosted investors' risk appetite and also spurred a rally in US stocks and commodities.

The NZ dollar's strength overnight came despite a 1.3 per cent decline in trade weighted index prices at Fonterra's overnight auction.

"The kiwi has just drifted off a bit. Aussie is down and the euro is down," one dealer said.

The NZ dollar was little changed against the Australian dollar at A77.00c at 5pm from A77.10c at 5pm yesterday.

After leaping against the Australian dollar yesterday afternoon, following the Reserve Bank of Australia's unexpected move to kept interest rates on hold, the NZ dollar climbed further overnight to a fortnight high around A77.50c.

The weakness of the US dollar has triggered rises in many currencies, causing a debate in several countries about whether they should intervene to knock local currencies lower to help exporters. The strength in the NZ dollar has been most pronounced against the US dollar and the currency has come off on some crosses in recent months.

The NZ dollar rose to 66.90 at 5pm on the trade weighted index from 66.56 at the same time yesterday.

It was at 62.22 yen at 5pm from 61.71 yen yesterday and at 0.5403 euro from 0.5417.

- NZPA