The New Zealand dollar took another peek over the key US70c mark today after US Federal Reserve chairman Alan Greenspan apparently gave the nod to renewed US dollar weakness, a broker said.
At 5pm, the kiwi was fetching US69.82c (from US69.49c at the same time last night), having traded between US69.72c and US70.15c, its highest since April 1997.
The Australian dollar was at US78.69c (US77.96c).
Westpac currency strategist Johnathan Bayley said Mr Greenspan's comments at about 5am NZT caused the kiwi to spike above the US70c mark and hit a fresh 6-3/4-year high.
Mr Greenspan said the US currency's decline should help narrow the gaping US current account gap.
He gave no hint of raising US interest rates from their 45-year low of 1 per cent. That low rate outlook is a critical consideration for the US currency.
"The market was a little bit disappointed that his comments did not follow the theme that tightening (of US monetary policy) is creeping closer," Mr Bayley told NZPA today.
"As a result we saw the kiwi-US shoot higher again, hitting the high late morning," he said, adding that some investors had taken profits with the kiwi at that level.
"Then there was a rapid move down to US69.72c and it (the kiwi) has traded sideways since."
The euro was at US$1.2472 (US$1.2696), while the greenback was buying 105.32 yen (105.47).
Despite the kiwi's strength against the greenback, it was "quite soft" against the currencies of most of its other trading partners.
On the crosses at 5pm, the kiwi was buying A88.70c (89.14c) 0.5439 euro (0.5473), 73.52 yen (73.29), 36.91 British pence (37.15), and 0.8591 Swiss francs (0.8587).
The trade-weighted index was up around seven-year highs at 68.08 (68.13).
"I think the market is still smarting from yesterday's softer than expected labour data and (Finance Minister Michael) Cullen's comments."
While the markets had paid little attentions to Dr Cullen's "options" comments late last year, its ears had pricked up when he talked of building foreign currency reserves, which could put pressure on the kiwi.
Meanwhile, the monetary conditions index was at plus 737 (741), and 90-day bank bills were at 5.58 per cent (5.59).
February 2006 bond yields fell to 5.48 per cent (5.52), July 2009 bond yields fell to 5.69 per cent (5.74), and the April 2013s fell to 5.84 per cent (5.91).
- NZ
<i>Currency:</i> Dollar hits US70.15c on Geenspan's comments
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