The New Zealand dollar popped higher in late trade yesterday as Moody's reaffirmed the country's foreign currency rating.
The kiwi finished at 40.19USc (39.97c on Friday), breaking out of its 39.95-40.05c range after the credit rating agency said its Aa2 rating remained stable and noted a detailed breakdown of the make-up of the massive current account deficit alleviated some concern about the country's vulnerability to shocks.
Moody's also noted the importance of Government surpluses in maintaining the confidence of the foreigners who funded the deficit.
However, ANZ chief foreign exchange Murray Hindley said the kiwi's main drivers, the aussie and euro dollars, remained weak.
"There should be a bit of resistance for the kiwi at 40.20c and again at 40.40c. On the downside we're looking at support around 39.80c."
So the local dollar appears safe in the short term from revisiting last week's historic low at 38.95USc.
However, the local branch of the Hong Kong and Shanghai Banking Corp said the euro had come under fresh pressure because the US dollar was the preferred safe-haven currency for money made nervous by the Middle East crisis.
- NZPA
<i>Currency:</i> Kiwi pops up on Moody's move
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