Kiwi dollar eases

The New Zealand dollar eased from recent highs, even as broad greenback weakness continued.

Increasing appetite of investors for risky assets pushed the low-yielding US dollar to fresh one-year lows versus the euro and a basket of currencies.

Higher stock prices this week and mostly positive economic data have dampened safe-haven demand for the US currency.

Optimism about a global recovery grew after a report showed factory activity in the US Mid-Atlantic region rose in September to its highest since June 2007, while separate data suggested improvement in the US housing and job sectors.

But the NZ dollar eased from recent 13-month highs around US71.55c to be at US70.92c by 8am today.

BNZ Capital senior strategist Danica Hampton pointed to comments by Bank of Japan Governor Masaaki Shirakawa that a stronger yen might support the Japanese economy in the longer run.

Those comments provided a bit of support for the yen and encouraged a bout of profit-taking from investors who had bought NZ dollars against yen, said Hampton.

The NZ dollar sank from around 65.20 yen to below 64.60, setting the scene for a softer kiwi against the US dollar.

At the margin, NZ dollar sentiment may also have been dented by the potential rise in government aid for dairy producers elsewhere in the world, Hampton said.

By 8am today the NZ dollar was at 64.67 yen and was also down to 0.4815 euro from a recent 13-month high of 0.486.

Against the Australian dollar, the kiwi was buying A81.49c at the local open, slightly down from its level at 5pm, while the trade weighted index was 64.51 at 8am from 64.83 at the local close.

- NZPA