The New Zealand dollar, heartened by the end of the military conflict in Iraq, changed from underperformer to outperformer today.
By 5pm the kiwi was at US55.37c - well up on last night's close of US54.65c and just shy of an overnight high of US55.45c.
Coalition forces have declared their 27-day war on Saddam Hussein all but over and have begun talks with Iraqis on how the country should be ruled.
Dealers said that had a positive effect on investor risk appetite, with a move back towards currencies that offered a high yield.
"Coming into the Easter period generally the high-yielding currencies perform quite well," ANZ Investment Bank chief foreign exchange dealer Murray Hindley said.
The kiwi was also helped by Monday's announcement that Australian media company Fairfax will bid for the publishing assets of Independent Newspapers Ltd. The $1.19 billion deal could have implications for New Zealand dollar demand.
The kiwi outperformed fellow yield plays, the Australian and Canadian dollars, despite a rate hike by the Bank of Canada overnight.
The Canadian central bank raised its key overnight lending rate to 3.25 per cent from 3.0 per cent. That compares with the US federal funds rate at a four-decade low of 1.25 per cent and the European Central Bank's benchmark interest rate at 2.50 per cent.
New Zealand's rate is still the highest in the developed world, at 5.75 per cent, although economists expect it to fall 25 basis points in June.
The Australian dollar was buying US60.87c at 5pm, from US60.35c at yesterday's local close. The greenback was buying 120.29 yen from 120.25 yen yesterday, while the euro rose to $US1.0807 from $US1.0762 yesterday.
On the key crosses, the kiwi was buying A90.99c (A90.62c at 5pm yesterday), 0.5123 euro (0.5080), 35.25 pence (34.79), 0.7703 Swiss francs (0.7606) and 66.60 yen (65.75).
The Australian dollar eased to $NZ1.0995 ($NZ1.1038).
On the money market, 90-day bills were at 5.79 per cent (5.82), the monetary conditions index was at plus 201 (plus 152) and the trade-weighted index was at 60.91 (60.27).
Among the bonds the April 2004 yields were at 5.49 per cent (5.48), the November 2006s were at 5.62 per cent (5.59) and the November 2011s were at 5.97 per cent (5.95).
- NZPA
<i>Currency:</i> Kiwi changes from underperformer to outperformer
AdvertisementAdvertise with NZME.