Kiwi dollar bumps US69c

The New Zealand dollar once again bumped up against the US69c level and was rebuffed.

For the third time this week the kiwi was briefly above US68.90c but was unable to push on to top US69c, a level untouched since last September.

The NZ dollar scooted up quickly from around US67.85c at 2am, peaking about 6.30am then easing to US68.83c by 8am.

ANZ bank said the early morning trading was "crazy".

With no real drivers, currency markets sprang to life, with the euro rising more than a full cent against the greenback in the space of a few minutes. The British pound, and Australian and NZ dollars joined in and spiked sharply higher, ANZ said.

The moves seemed to have all the hallmarks of a lack of liquidity and a squeeze higher as stop losses were triggered. They illustrated how fickle markets were for now and how a lack of liquidity could cause some added volatility.

The NZ dollar lifted to 0.4794 euro at 8am from 0.4766 at 5pm yesterday, and was up to 64.38 yen from 63.65.

Against the Australian dollar, the kiwi was little changed at A81.91c by the local open, while the trade weighted index rose to 63.79 at 8am from 63.30 at 5pm.

Reuters reported the fall of the US dollar to multi-week lows against the yen and euro, and the rally by commodity-linked currencies, came as a recovery in US stocks and the price of oil quelled some worries about the global economy.

Earlier, a slide in Chinese and European stocks stoked caution about the global outlook, prompting investors to buy the yen as a safe haven and sell perceived higher-risk currencies such as the euro.

But a mid-afternoon rebound that took Wall Street stocks back to levels last seen in October boosted the euro to a three-week high against the US dollar, though traders said low volume was responsible for the ferocity of the reversal.

- NZPA