NZ dollar eases slightly

The New Zealand dollar pushed to a five-week peak above US73c today as it continued to be swept along by a surge in global risk appetite but it finished off its best levels.

The NZ dollar was trading at US72.94c at 5pm, down from US73.17c at 8am, and up from US72.46c at 5pm on Friday. It has risen 5 per cent from the August low around US69.45c, Reuters reported.

Westpac said local factors have been largely negative, citing the recent South Canterbury Finance collapse and Canterbury earthquake and weak economic data.

Also, if the Reserve Bank of New Zealand (RBNZ) holds the official cash rate at 3 per cent on Thursday, as expected, "yield support" for the currency will be removed.

But this will all count for little as global risk appetite is expected to remain elevated this week, Westpac said.

US equities firmed on Friday and sharemarkets around Asia were also firm today.

Imre Speizer, senior currency strategist at Westpac said the overall impression was US double-dip concerns had receded, although a strong US wholesale inventory report may have added fuel to the rally at the New York open.

He said from a technical point of view the break above US72.25c last week signalled a move to the US73.60c to US74.00c area. If US74.00c is broken this week, the next target would be US76.30c, but the probability of this scenario is low.

Federated Farmers today called on the RBNZ to hold rates unchanged at its monetary policy statement on Thursday, citing the higher currency as a reason.

"Even before the unknown economic impact of Canterbury's 7.1 magnitude earthquake, we faced an appreciating kiwi dollar," said Lachlan McKenzie, Federated Farmers' acting economics spokesperson.

ANZ National Bank economist Mark Smith said no change was expected to the OCR.

"However, expect the tone of statement to be unusually subdued in light of the situation in Christchurch and this may see another reversal for the NZ dollar from recent highs," he said.

The Australian dollar held near four-month highs.

The NZ dollar was at A78.40c at 5pm from A78.72c at 8am, and A78.58c at 5pm Friday.

It was at 61.36 yen from 60.86 yen and 0.5699 euro from 0.5714.

The trade weighted index rose to 67.59 at 5pm from 67.41 on Friday.

- NZPA