NZ dollar gains vs euro, yen

The New Zealand dollar gained on the euro and yen overnight and reached its highest level against the greenback in about 10 days before falling back to just under the US71c level by today's local open.

Around 8am the kiwi was buying US70.98c, slightly below its level at 5pm yesterday, after peaking overnight around US71.30c, its highest level since March 19.

The US dollar gained on the euro and yen as strong consumer confidence data bolstered views the Federal Reserve will raise interest rates sooner than its Japanese or European counterparts.

BNZ strategist Mike Jones said that early in the night, the NZ dollar was underpinned against the greenback by strengthening commodity prices and the firmer British pound.

Solid gains in metals prices and news that Australian mining companies were securing huge rises in iron ore prices also supported commodity-linked currencies such as the NZ dollar, said Jones.

But a late rally in the United States dollar knocked the NZ dollar off its perch against the greenback, following more evidence that the US economy was finding its feet.

ANZ bank said that with rising expectations that the Reserve Bank of Australia would lift interest rates across the Tasman next week, the NZ dollar could get dragged higher on the back of the aussie's coat-tails.

It expected further NZ dollar under-performance relative to the Australian currency.

By today's local open the kiwi had slipped to A77.24c from A77.32c at 5pm yesterday, but rose to 0.5291 euro at 8am from 0.5268 at the local close, and was also up to 65.90 yen from 65.50. The trade weighted index rose to 66.07 at 8am from 65.99 at 5pm.

- NZPA