NZ dollar fails to hold gains on stronger greenback

The New Zealand dollar pushed back to within a whisker of US69c overnight but was unable to hang on to the gains against a broadly strengthening greenback.

By 8am the kiwi was buying US68.35c, slightly down from its level at 5pm yesterday, after reaching a fortnight-high US68.99c at its peak last night, according to Reuters data.

In its morning briefing notes, ANZ said a wild ride higher for the NZ dollar was driven by specific flows and yield demand. But it was unsustainable above US68.91c and quickly reversed in the European session.

The kiwi opened today weighed on a weaker equity market in the United States.

Having covered familiar ranges and unable to break outside the broader US66.22c to US68.91c range, the NZ dollar needed new impetus to move, ANZ said.

That could come from the Reserve Bank interest rate review next Thursday.

The broad rise in the US dollar came first on bets for a strong reading of US payrolls data tonight (NZT), but later bearish investors also bought US dollars on risk aversion in case expectations for jobs growth were too high.

The NZ dollar rose against the Australian currency to A81.07c at the local open from A80.82c at the local close, and was up to 0.5622 euro at 8am from 0.5569 at the local close.

The kiwi was slightly higher at 63.31 yen at 8am from 63.15 at 5pm as political uncertainty continues in Japan, while the NZ dollar's trade weighted index was up to 66.71 at 8am from 66.51 at 5pm.

- NZPA