KEY POINTS:
The New Zealand dollar was confined to a range today around US79.50c, but was likely to head higher, a foreign exchange dealer said.
By 5pm, the kiwi was at US79.48c from US78.82c late yesterday afternoon, declining from session highs but holding onto some of the gains made overnight.
Stability in equity and credit markets raised optimism that the worst of the financial crisis might be over and had encouraged investors to buy riskier assets.
"I think it's going to go higher again, I wouldn't be surprised if we go through US80.20c overnight," said ANZ Institutional Bank senior dealer Mark Elliott.
"An absence of any negative reaction to US data on the US stock market prompted yield-seeking currency plays."
The kiwi had little reaction to a plunge in business confidence shown in the NZ Institute of Economic Research's March quarter business survey. Company pessimism was accompanied by plans to keep on raising prices as costs also rose, stoking inflation pressures that would concern the Reserve Bank and keep rates on hold.
Against the Australian dollar, the kiwi was a touch firmer at A85.81c from A85.64c yesterday, and it was also stronger against the euro, yen, and sterling, pushing the trade weighted index to 71.77 from 70.20.
The Aussie also rose, to US92.60c by 5pm from US92.04c, despite a survey showing declining Australian business conditions.
The euro rose more than one US cent from its lows against the dollar, as the US currency remained pressured by worries about a recession and the prospect of further interest cuts by the Federal Reserve.
Reuters currency rates:
NZ dlr/US dlr US79.48c US78.82c
NZ dlr/Aust dlr A85.81c A85.64c
NZ dlr/euro 0.5050 0.5031
NZ dlr/yen 81.29 80.77
NZ dlr/stg 40.00p 39.62p
NZ TWI 71.77 70.20
Australian dollar US92.60c US92.04c
Euro/US dollar 1.5738 1.5667
US dollar/yen 102.27 102.47
- NZPA
