NZ dollar firm against Aussie

The New Zealand dollar was firm against the Australian dollar today even though the Australian dollar was itself in favour with investors.

By 5pm the NZ dollar was buying A78.16c, up from A78.04c at 8am but still below the A78.45c at 5pm yesterday. It rose as high as A78.27c today.

"The aussie cross saw the most action today. We've really seen some leveraged and speculative demand to buy the NZ dollar against the aussie. There is a view going around that it is looking cheap at these levels," said Mike Jones, BNZ capital strategist.

The cross against the Australian dollar has been around five-month lows.

The Reserve Bank of Australia is expected to take a more measured approach after raising its cash rates by 25 basis points to 3.75 per cent on Tuesday. The Reserve Bank of New Zealand pronounces on its 2.5 per cent official cash rate on December 10.

The NZ dollar rose to US72.68c at 5pm from US72.26c at 8am from US72.74c at 5pm yesterday.

The Australian dollar rose to US92.98c from US92.70c at 5pm yesterday but is finding US93c a barrier.

News that Bank of America is to repay its Troubled Asset Relief Programme funds in the next few days and a late rally on the US stock market helped to improve sentiment for high risk currencies like the NZ dollar.

But a European Central Bank interest rate decision and the non-farm payrolls report from the United States this week are still awaited.

The NZ dollar was at 0.4816 euro from 0.4819 yesterday and 63.86 yen from 63.31. The trade weighted index was 64.38 from 64.40.

- NZPA