The New Zealand dollar was on the up yesterday, hitting a three year high against its Australian counterpart.
The kiwi strode out against the aussie to an intra-day level of A87.90c - the highest on the trans-Tasman cross since 1998.
By 5pm the kiwi had eased to A87.65c, compared with Friday's close of A87.60c.
"The kiwi-aussie's gone a long way from its low of two years ago of A72.50c, we've moved up not in a straight line but steadily higher," Bancorp Treasury Services executive director Earl White said.
"Over the last couple of years the New Zealand economy has performed better, interest rate differentials have definitely favoured us all the way through, and really it's become almost self-fulfilling."
The New Zealand dollar was also higher against the US dollar at 5pm, trading at US49.06c, compared with Friday's close of US48.58c. The Australian dollar was buying US55.98c (US55.46c). The kiwi hit four-month high of US49.29c in offshore trade .
The kiwi was pushed higher during offshore trade on Friday by reasonable buying from a United States-based investment house, Mr White said.
"It snuck up in the morning on a bit of stop-loss buying, I suspect, and since then has hit a wall of importer selling and also some profit-taking.
"It just ran out of steam quite quickly here. The higher than US49c area is attractive to importers as we head into that big Christmas bubble, when they are finalising their payments for those imports they are going to make."
The kiwi's rise was more than a knee-jerk reaction to a weak US dollar, as its rise predated the greenback's fall at the end of last week.
Mr White picked kiwi to trade between US48.80c and US49.30c overnight, although the overnight session was unlikely to explore the entire range as the absence of Tokyo and Singapore yesterday removed some volume.
In offshore trade, poor US data sent the euro to parity against the greenback on the back of jobs and manufacturing data which fuelled concerns that US economic growth had stagnated. However, the euro lost some ground to trade at US99.61c in Wellington.
On the crosses at 5pm, the kiwi was at 0.4925 euro (0.4936 at Friday's close), 59.99 yen (60.05), 0.3137 pence (0.3143), and 0.7205 Swiss francs (0.7214).
The Australian dollar was buying $NZ1.1410 ($NZ1.1415).
The 90-day bank bill yield was at 5.91 per cent (5.92), the New Zealand dollar trade-weighted index was at 55.94 (55.63), and the monetary conditions index tightened to minus 211 (minus 240).
The April 2004 bonds were at 5.67 per cent (5.61), the November 2006s were at 5.97 per cent (5.93), and the November 2011s were at 6.23 per cent (6.18).
- NZPA
<i>Currency:</i> Kiwi higher against Aussie, Greenback
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