Kiwi dollar hits 12 month high

The New Zealand dollar hit 12-month highs against the US dollar early this morning, then slipped away as investors awaited today's official cash rate (OCR) announcement.

Economists have predicted the Reserve Bank (RBNZ) could this morning cut the official cash rate (OCR) by 25 basis points.

At 2am the kiwi dollar bounded over US70c to peak at US70.07 - its highest rate against the US dollar since this time last year.

By 8am it was back below US70, after trending steadily down for six hours.

It was worth US69.67 at 4am and US69.57 at 8am.

The ANZ said "today is all about the data" as New Zealand waited on the OCR decision, and Australia sweated on labour numbers, due this afternoon.

"Rumours of a barrier option at 0.7000 were accurate, though the level was not well defended and the kiwi suffered only a few failed attempts before a break," ANZ said.

The US dollar was trading near one-year lows against a major currency basket, as growing evidence of a global recovery spurred investors to move into riskier currency trades.

The NZ dollar hit a six-year low in early March but has grown about 40 per cent since, helped by overseas investors boosting their exposure to higher-yielding currencies.

A rise in European and US stocks further underpinned the market's appetite for risk and reduced demand for the dollar as a safe haven, pushing the euro to fresh highs for 2009.

At 8am, the kiwi was at .4780 euro, down on the .4804 it was trading at yesterday at 5pm.

The NZ dollar fell against the Australian dollar, from 80.95 last night to 80.75 this morning, and to 64.04 against the yen, from 64.24 at 5pm yesterday.

It was worth 42.08 pence against the British pound, down by .05 from 5pm yesterday.

The trade weighted index was 63.71 at 8am, down from 63.84 yesterday evening.

- NZPA