The New Zealand dollar was trading close to a month high today following a sharp fall in the US dollar.
The kiwi traded as high as US63.56c, just shy of a month-high of US63.60c touched last week. By 5pm it was buying US63.50c, well above Friday's US62.79c local close.
The US dollar tumbled to a three-month low against the yen today after Group of Seven powers said China should let the yuan appreciate as a way of fixing global trade imbalances.
Finance ministers of the world's biggest economies called for major exporting nations to allow their currencies to rise against the US dollar to help resolve the imbalances, highlighted by the massive US trade deficit and China's booming surplus.
The G7's new rhetoric came just as investors soured on the US currency as global imbalances took centre stage in the lead up to the Washington meetings and some central banks said they would shift reserves out of the dollar.
On the local scene, the focus is on Thursday's six-weekly review of interest rates by the Reserve Bank, where economists universally expect no change. Economists expect a hawkish statement that will further dampen prospects of interest rate cuts this year.
ANZ National Bank chief economist Cameron Bagrie said the New Zealand dollar would "push the topside" ahead of the statement and that would trigger stop loss buying that could push the kiwi up into the US64-65c region.
On its Australian dollar cross, the kiwi rose to A85.22c from A84.92c on Friday. The aussie rose to US74.51c from US73.91c.
The New Zealand dollar trade-weighted index rose to 64.47c from Friday's 64.10 close.
The following are Reuters currency rates:
5pm today 5pm Friday
NZ dlr US63.50 US62.79c
NZ dlr/Aust dlr A85.22c A84,92c
NZ dlr/euro 0.5141 0.5099
NZ dlr/yen 73.48 73.82
NZ dlr/stg 35.55 35.28p
NZ TWI 64.47 64.10
Australian dollar US74.51c US73.91c
Euro/US dollar US1.2353 US1.2311
US dollar/yen 115.71 117.56
- NZPA
<EM>Currency:</EM> Dollar rebounds as US dollar plunges against yen
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