NZ dollar firms after overnight fall as Chinese market rebounds

The New Zealand dollar rose in afternoon trading to close near session highs as the Chinese stock market rebounded.

By 5pm yesterday the NZ dollar was buying US67.50c, up from US67.27c at 8am, but little changed from US67.54c at 5pm on Wednesday.

The NZ dollar had dropped near US66.80c, its lowest level in a fortnight, in overnight trading on Wednesday but it was a different story yesterday.

China's key stock index was up 4.8 per cent yesterday after a top securities regulator assured investors the country's market was healthy and this improved sentiment for risky currencies.

Dealers said there was some covering of short positions as well. Still, the yen hit a seven-week high yesterday on unease ahead of US non-farm payroll data today.

There are worries the report will reflect a slower recovery than investors have priced into markets, raising uncertainty about riskier assets.

The Australian trade gap blew out in data yesterday but Australian gross domestic product data on Wednesday was stronger than expected. The NZ dollar was at A80.78c at 5pm from A81.14c on Wednesday. It was at 62.27 yen from 62.65 on Wednesday. The trade weighted index was 62.63 from 62.85.

Locally the focus is on next week's Reserve Bank of New Zealand interest rate decision.

- NZPA