Currency: Kiwi dollar bounces overnight

The New Zealand dollar bounced overnight as manufacturing data from the United States and Europe pointed to further recovery in the global economy.

Around 8am today the kiwi was up to US70.81c from US70.02c at 5pm yesterday.

ANZ bank said failed attempts to push lower in the local and late Asian sessions yesterday meant the NZ dollar bounced overnight.

The Reserve Bank of Australia's interest rate decision at 4.30pm this afternoon loomed large as the major event of the day, with most commentators expecting a lift of 25 basis points.

BNZ Capital strategist Mike Jones said that sentiment towards growth-sensitive currencies such as the NZ dollar had recovered overnight.

Global manufacturing data provided a clear reminder that the outlook for the global economy in 2010 was much better than in 2009.

The NZ dollar lifted to 0.5089 euro at 8am from 0.5049 at 5pm and was up to 64.27 yen from 63.12.

Against the Australian dollar the kiwi was moderately higher at A79.57c at the local open from A79.36c at 5pm, while the trade weighed index was 65.23 at 8am from 64.66 at 5pm.

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US factory activity rose to a 5-1/2-year high in January, according to an index of the Institute for Supply Management. In Europe, the euro zone manufacturing sector grew at its fastest pace in two years last month, according to the Markit Eurozone Manufacturing Purchasing Managers' Index.

The US dollar climbed against the yen on the better-than-expected US manufacturing data, while the euro snapped four days of declines against the greenback on increased demand for risk as investors bet the global recovery is gaining momentum.

- NZPA