NZ dollar pushes up on weakening US

Photo / Dean Purcell

The New Zealand dollar got within a whisker of its highest level against the greenback in more than two years, as reaction continued to Federal Reserve meeting minutes which reinforced expectations of more monetary easing in the United States.

The kiwi peaked near US76.35c, according to Reuters data, similar to the previous high hit nearly a year earlier, which had itself been the highest level for more than 15 months. By 8am the NZ dollar had eased to US76.17c, which was still a solid lift from US75.68c at 5pm yesterday.

More Fed easing means more cheap US dollars in the market and low US rates eroding the return on US dollar-denominated assets.

ANZ bank said the European session had seen equities strengthening and interest rate yields edging up.

"Having stalled in a comparative sense the last couple of days, the NZD was fired up overnight by underlying offshore demand," ANZ said.

The US dollar index, which measures the greenback's performance against a six currency basket, fell 0.4 per cent to a level not far from a nine-month low set last week.

The US dollar also eased to a record low of 0.9546 Swiss francs, while the Australian dollar climbed to its highest level against the US dollar since it was allowed to float freely in 1983. The aussie climbed as high as US99.29c before retreating.

The NZ dollar eased up to A76.83c at 8am, and strengthened to 62.30 yen from 61.95 at 5pm. The kiwi reached a three-week high near 0.5475 euro early today, before easing to 0.5458 euro at 8am from 0.5422 at 5pm. The trade weighted index climbed to 67.48 at 8am from 67.14 at 5pm.

- NZPA