After finding its feet in overnight trading, the New Zealand dollar today went for a whirlwind ride higher with its Australian counterpart.
At 5pm, the kiwi was fetching US61.36c (from US60.73c at market's close yesterday), while the aussie was at US70.95c (US69.67c)
A National Bank broker said the New Zealand dollar had hitched a whirlwind ride higher with the Australian dollar after the Reserve Bank of Australia raised its official cash rate (OCR) 25 basis points to 5.00 per cent.
The move was to rein in soaring consumer debt and a property boom, and flagged the start of what markets expect will be a global round of rate increases.
"When the Australians hiked their OCR the Aussie-US just took off and took the kiwi-US with it," the broker said.
"We went from about US61.35c to US61.75c very quickly. The aussie went well above US71c and it has pulled back from there."
The kiwi traded between US61.18c and US61.75c, before settling at its closing level.
Meanwhile, the aussie-kiwi cross went backwards today, closing at A86.49c (A87.14c).
In other foreign exchange news, Finance Minister Michael Cullen today said he was pondering "options" to influence the value of the soaring New Zealand dollar.
"The Government doesn't regard itself as entirely without options in this respect, but those options have to be dealt with very carefully indeed," Dr Cullen said at the finance and expenditure select committee.
The broker said Dr Cullen was trying to talk down the strong New Zealand dollar.
"He's just stipulating that if he wanted to intervene then he has got the power to do that.
"He's trying to talk it down and it's good for the economy if he can, but I don't think he's going to be successful."
At market's close, US dollar was at 109.65 yen (110.08), while the euro was at US$1.1485 (US$1.1441).
On the crosses, the kiwi was buying 67.28 yen (66.86), 36.40 pence (36.33), 0.8367 Swiss francs (0.8276), and 0.5343 euro (0.5307).
The Australian dollar was at $1.1563 ($1.1472).
The trade weighted index was at 63.45 (63.12), the monetary conditions index was at plus 359 (329), and 90-day bank bills were at 5.31 per cent (5.27).
On the debt market, yields on April 2004 bonds were at 5.25 per cent (5.20), February 2006s were at 5.83 per cent (5.80), and November 2011s were unchanged at 6.15 per cent.
- NZPA
<i>Currency:</i> Kiwi hitches ride with Australian dollar
AdvertisementAdvertise with NZME.