Kiwi dollar starts week with a lift

The New Zealand dollar spiked up against major currencies when the market opened today, supported by weekend media reports suggesting Eurozone members had worked out a bailout deal for Greece.

After being around US70.10c for the last few hours of trading on Saturday morning (NZT), the kiwi raced up to US70.36c around 8am today, from US69.98c at 5pm on Friday.

Overnight Friday, the US dollar dropped to a one-month low against the euro, as investors pared back large bearish bets on the European currency following strong euro zone economic data.

The biggest monthly increase on record in euro zone industrial output in January and an upward revision of figures for December also prompted a modest increase in risk appetite.

Unexpectedly strong US February retail sales data briefly boosted the greenback against the yen and added to optimism about the world's biggest economy.

The NZ dollar had fallen from 0.5109 euro at Friday's local close to around 0.5090 euro - as it sinks from a two-year high above 0.5200 euro late Wednesday - but today's early rush higher took it back up to 0.5105 euro.

The kiwi had also been around 63.40 yen, similar to the level at 5pm on Friday, but today's early surge took it up to 63.88 yen around the local open.

Against the Australian currency, the NZ dollar generally trended upwards overnight Friday, getting to A76.63c around 8am, from A76.38c at the local close last week. The trade weighted index rose to 64.76 around 8am from 64.61 at 5pm Friday.

BNZ markets strategist Mike Jones said the NZ dollar had benefited from some developments over the weekend that were generally risk positive, particularly a media report that a bailout deal for Greece would be announced after a meeting of eurozone finance ministers.

ANZ bank said that having survived tests of the downside throughout last week, the NZ dollar should begin anew. Support would take many forms not the least of which would be a weaker US dollar and stronger euro, as well as natural demand from all quarters.

- NZPA