The New Zealand dollar hitched a ride with a strengthening euro yesterday, as Asian investors swung away from the sickly United States economy.
By 5pm the kiwi was at US48.73c, near its session highs after trading in a 30-point range during the day. It closed at US48.03c on Friday.
The kiwi outperformed the Australian dollar, which ended at US56.08c from US55.76c at Friday's close.
Dealers said the main concern continued to be the global recovery. The US economy took another body blow on Friday with the release of the University of Michigan's consumer sentiment index, which showed the lowest reading since November 2001. That saw the Dow Jones index fall 1.33 per cent.
Locally there was little reaction this morning to the June quarter Consumer Price Index. Prices rose by 1 per cent over the quarter, in line with expectations, giving an annual rise of 2.8 per cent for the June year.
With inflation running comparatively strongly, some analysts expected the Reserve Bank to raise interest rates next month by 25 basis points to help keep prices under control.
During the day, the euro flexed some muscles in Asian markets and sentiment was that it could rise to parity with the US dollar again overnight.
"There's probably a good chance the kiwi could have a look back to US49.10c," said Murray Hindley, chief foreign exchange dealer with the ANZ.
"The general perception is that we're going to continue to see further weakness in the US equity markets early this week, and obviously through Asia we'll see some strength through the euro."
On the crosses at 5pm the kiwi was buying A86.90c (A86.15c at Friday's close), 56.67 yen (56.11), 31.35 pence (30.95), 0.7198 Swiss francs (0.7135) and 0.4900 euro (0.4867).
Against the kiwi, the aussie was buying $NZ1.1507 ($NZ1.1619).
On the money market, 90-day bills were at 6.03 per cent (6.05), the trade-weighted index was at 55.02 (54.44) and the monetary conditions index was at minus 283 (minus 334).
On the debt market, the April 2004 bonds were at 5.80 per cent (5.88), the November 2006 bonds were at 6.22 per cent (6.27), and the November 2011 bonds were at 6.50 per cent (6.59).
- NZPA
<i>Currency:</i> Kiwi bolstered by rising Euro
AdvertisementAdvertise with NZME.