Kiwi dollar powers ahead

The New Zealand dollar powered ahead amid solid gains for commodity prices, improving international economic data, easing concerns about Greek debt, and ahead of an expected rise in Australia's benchmark interest rate.

The kiwi reached its highest level in more than three months against the greenback, topping US73.20c before edging down to US73.14c by 8am today, well up on the US72.76c at 5pm yesterday.

The NZ dollar also reached a 33-month high near 0.5550 euro, climbing from around 0.5500 euro at yesterday's local close, and easing only slightly to 0.5542 at 8am.

Despite a decision to provide an aid package for Greece, the euro was under pressure as markets worried whether Greece could adopt the wage cuts and tax hikes required as part of the deal, and whether Germany would secure parliamentary approval to release the money.

The greenback was boosted against the euro and the yen as United States manufacturing data increased optimism about economic recovery.

The kiwi reached a six-month high 69.35 yen, slipping to 69.19 yen at the local open, well up from 68.35 yen at 5pm.

Against the Australian dollar, the kiwi peaked briefly above A79c around 7am to its highest level in nearly three months. By 8am the NZ dollar was at A78.94c from A78.76c at the local close. The trade weighted index was 68.41 at 8am from 68.00 at 5pm.

The Reserve Bank of Australia is expected to raise its benchmark interest rate by 25 basis points to 4.5 per cent at 4.30pm New Zealand time today, particularly after Australia's house price index jumped 4.8 per cent in the first quarter.

In its morning briefing, ANZ said that while a rate hike should see the Australian dollar remain firm, expectations around New Zealand interest rate moves could see further attempts to break through resistance at A79.05c.

Underlying support with rising commodity prices would help to provide a base for the NZ dollar today, ANZ said.

The ANZ commodity price index, published yesterday, jumped 4.9 per cent in April. It was underpinned by a 9.9 per cent surge in dairy prices, but overall 10 of the 13 commodities monitored recorded a rise.

While the NZ dollar also rose in April, the increase was slight and ANZ's NZ dollar commodity price index had a solid 3.8 per cent lift.

- NZPA