Currency: Dollar bounces up over US53c

The New Zealand dollar recovered some of the ground lost earlier today on continued risk appetite and hopes that the Reserve Bank of Australia would continue holding rates steady.

By 5pm, the kiwi was at US53.12c from US52.36c late yesterday afternoon, having peaked overnight at a five-week high of US53.40c on the back of stronger equities in the United States.

Against the Aussie, the kiwi was at A80.40c from A79.78c, and it had also firmed against the euro, yen and sterling.

A late sell-off in equities had pushed the kiwi down to US52.85c. However, it bounced above US53c again this afternoon after Reserve Bank of Australia minutes were released justifying the central bank's decision this month to leave official interest rates steady.

That was not the view of Westpac economists, who were picking a cut of 25 basis points in April, said Westpac NZ senior market strategist Imre Speizer.

The latest improvement in global risk appetite, which was also benefiting the kiwi along with other currencies such as the euro, was now six days old, Mr Speizer said.

However, longer term - three months out - Westpac expected the kiwi to slip to around US47c.

The euro rose towards another 11-week high against the yen and a five-week high against the US dollar today, as a rise in regional share prices underlined some recovery in risk appetite.

The yen and the US dollar slipped against higher-yielding currencies, with global stock markets having shown signs of stabilising over the past couple of weeks and currency market volatility having drifted lower.

Currency rates:

NZ dlr/US dlr US53.12c US52.36c

NZ dlr/Aust dlr A80.40c A79.78c

NZ dlr/euro 0.4085 0.4060

NZ dlr/yen 52.24 51.42

NZ dlr/stg 37.61p 37.32p

NZ TWI 54.09 53.54

Aust dlr/US dl 66.07c 65.60c

Euro/US dlr 1.3003 1.2893

US dlr/yen 98.32 98.23

- NZPA