NZ dollar climbs as Australia holds rates steady

Events across the Tasman - a no-change in interest rates and an expected decision about the Australian government - pushed the New Zealand dollar higher in a late run against its Australian counterpart.

However, the kiwi was steady against the US dollar, having recovered ground lost earlier in the day.

Late this afternoon, the Reserve Bank of Australia said it left interest rates at 4.5 per cent, as expected, as inflation posed few problems and the global outlook remained uncertain.

Putting more pressure on the Aussie, which had taken a sharp dive, a press conference at which the Australian government was expected to be revealed in fact made the situation no clearer. The Labour Party and the conservative coalition had the support from one of each of the three independent MPs, with the third then announcing support for Labour.

By 5pm, the kiwi was at A79.10c, up from A78.68c late yesterday afternoon and a similar level this morning. After Julia Gillard was announced as prime minister, the kiwi was trading at A91.20c as the aussie dipped further.

Against the US dollar, the kiwi was at US72.32c, from US71.13c yesterday. It hit a low of US72.02c during today's session.

The kiwi was firmer against the euro, at 0.5652 from 0.5594, and sterling, at 47.04p from 45.63p, and steady against the yen.

The trade weighted index jumped to 67.21 from 65.92 late yesterday.

In trading among the major currencies, the euro slid from yesterday's three-week peak against the US dollar due to concerns about the European banking sector.

- NZPA