NZPA - The New Zealand dollar staked its claim as the comeback kid of the Pacific yesterday, gaining over half a cent against the greenback.
By 5pm the kiwi was at US48.91c from US48.38c at Friday's close.
Buoying the local unit were a stronger euro and Australian dollar, which rallied on reports of another accounting scandal in the United States.
The euro firmed to US98.58c from US97.43c earlier in the session, while the Australian unit was at US56.30c (US55.69c at Friday's close).
In the latest scandal to rock corporate America, Houston-based energy trader and electricity generator Reliant Energy said it had erased $US7.9 billion ($NZ16.41 billion) from its accounts for the last three years.
"It really just gets down to a confidence issue more than anything else, that all is not well in the US stock market," one local dealer said.
Comments from Finance Minister Michael Cullen that exporters to Australia were being hurt by the high value of the New Zealand dollar took some of the shine off the kiwi/aussie cross, however.
At 5pm the kiwi was buying A86.88c compared with A87.13c earlier in the session.
"If (kiwi) continues to appreciate against the Australian dollar clearly more exporters will be in difficulties and that is not in the interests of sustainable long term growth in New Zealand," Dr Cullen told reporters at the release of his Labour Party's economic policy for the coming general election.
Dr Cullen also promised to make the Reserve Bank of New Zealand's inflation target more flexible if Labour was re-elected for a second term.
He has criticised the RBNZ for interpreting the Policy Targets Agreement too narrowly by targeting the 1.5 per cent midpoint of a zero to three per cent inflation band, rather than the full range.
Dealers expected the kiwi to trade between US48.70c and US49.40c overnight.
On the other main crosses at 5pm the kiwi was trading at 58.27 yen (58.27 on Friday), 31.91 pence (31.81), 0.7284 Swiss francs (0.7264) and 0.4961 euro (0.4957).
Against the kiwi, the aussie was buying $NZ1.1510 ($NZ1.1510).
On the money market 90-day bills were at 6.06 per cent (6.01), the trade-weighted index was at 55.61 (55.38) and the monetary conditions index tightened to minus 227 (minus 253).
On the debt market the April 2004 bonds were at 6.00 per cent (5.99), the November 2006 bonds were at 6.34 per cent (6.39), and the November 2011 bonds were at 6.67 per cent (6.63).
- NZPA
<i>Currency:</i> Kiwi Pacific comeback kid as Euro rallies
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