NZ dollar up against aussie

Photo / Dean Purcell

The New Zealand dollar peaked at a 2-1/2-month high against its Australian counterpart on Friday night after markets were rattled by Chinese moves to tighten reserve requirements for banks.

The kiwi rose to around A79.10c late on Friday and by 8am today was at A78.90c, up from A78.64c at 5pm on Friday.

The NZ dollar was also up to US77.91c at 8am during a bouncy overnight Friday session during which it dropped to around US77.45c and peaked around US78c.

ANZ bank said currency trading at the end of the week was affected briefly by the Chinese move to lift its required reserve ratio on Friday night, which had originally been reported as an interest rate hike.

Moves by the aussie after the Chinese news on Friday night showed the corrective abilities of the Australian currency, and while the NZ dollar had that capacity it may lag any such move, helping to lift the cross, ANZ said.

This morning the centre of attention would be a rescue package for Ireland.

Irish Finance Minister Brian Lenihan said the country would seek a bailout from international lenders, ending weeks of speculation that the country would need help to prop up its banks and help it secure cheaper state funding.

The bailout - which would be the second rescue package for a euro zone country this year - would be less than €100 billion euros, he said, but did not give details of the likely cost.

The NZ dollar was buying 0.5680 euro at 8am today from 0.5691 at 5pm on Friday, with the kiwi also up to 64.98 yen from 64.65, while the trade weighted index rose to 69.59 from 69.44.

The euro rose broadly in the overnight Friday session, gaining for a third straight day versus the US dollar, as investors grew more confident that Ireland's debt crisis would be resolved.

- NZPA