Dollar hits nine year low against Aussie, then lifts

The New Zealand dollar consolidated for most of today after rising strongly through the early hours of the morning, buoyed by surging prices at Fonterra's monthly online auction.

The NZ dollar was US70.45c at 5pm today after rising to US70.72c from US70.23c at 5pm yesterday.

ANZ said a 21 per cent rise in wholemilk powder prices at the overnight auction was welcome news for the NZ dollar.

The auction price rise came hot on the heels of yesterday's ANZ commodity price index, which showed a new record high for this country's major export commodities.

BNZ currency strategist Mike Jones said the wholemilk powder price was higher than expected and the main event of the day.

"There's been a recovery in NZ dollar sentiment throughout the day after a sell off overnight. We have seen ongoing demand for the NZ dollar today, mainly from Japanese accounts," he said.

The NZ dollar had consolidated against the Australian dollar today after falling to its lowest level in more than nine years to A75.5c yesterday. It was at A76.01c at 5pm today from A76.20c at the same time yesterday.

The aussie gained extra strength against the NZ dollar after the Reserve Bank of Australia yesterday raised interest rates by 25 points, as expected by many economists, taking rates across the Tasman to 4.25 per cent.

The NZ dollar was buying 0.5264 euro at 5pm, up from 0.5234 at the same time yesterday, and was up to 66.34 yen, having reached an 11-week high above 66.90 yen against the Japanese currency on Monday morning.

The trade weighted index rose to 65.60 from 65.39 yesterday.

- NZPA