NZ dollar starts week strongly

The New Zealand dollar started the week strongly and is expected to remain supported ahead of the Reserve Bank of New Zealand's (RBNZ) interest rate review on Thursday.

By 5pm today the NZ dollar was at US71.84c from US71.69c at 8am and US71.10c at 5pm Friday. It rose as high as US72.02c today, its highest level since January 21.

The NZ dollar rose during the weekend when an improved risk appetite lifted equities, commodities, risk currencies and United States yields.

Greece formally requested aid from the International Monetary Fund and the European Union, leading to a sigh of relief from markets that a rescue process was finally under way.

Westpac expects the currency to maintain an upward bias this week. A successful break of US72c would make US74c a target in coming weeks.

The RBNZ is expected to keep the official cash rate unchanged at 2.5 per cent on Thursday and this is seen as the main event of the week.

The NZ dollar also reached a new three-month high against the yen, trading to 67.90 yen before settling at 67.66 at 5pm from 66.39 at the same time on Friday.

It was A77.44c at 5pm from A77.07c on Friday.

Against the euro the NZ dollar is trading at levels not seen since early 2008. It was 0.5374 euro at 5pm from 0.5371 euro at 5pm on Friday.

The trade weighted index was 66.89 from 66.37 on Friday.

- NZPA