Encouraged by a strong recovery on Wall Street, the kiwi dollar spurted higher yesterday, finishing on its highs.
It closed at US48.25c after closing on Thursday at US47.97c.
The kiwi was strong against virtually all currencies and the New Zealand dollar trade-weighted index finished on a three-month high of 55.73 after closing on Thursday at 55.33.
A recovery in US equity markets augured well for a global economic recovery and that is deemed good for the high yielding New Zealand and Australian dollars.
However, a Wellington dealer doubted the equity market's recovery would be sustained. He said the intra-day moves of the Dow Jones Index had been so large, no one could have confidence in the next move.
"Where is the kiwi going? Watch the Dow," he advised.
The Australian dollar broke above US55c to finish at US55.13 compared with 54.85c on Thursday.
Overnight the greenback blasted to four-month highs against the yen and one-month peaks against the euro on a growing conviction that economic weakness in the United States is nothing compared to the dark prospects overseas.
Locally, the US dollar closed at 125.09 yen (124.35 yen) and the euro finished at US97.21c (US97.78c).
On the crosses, the kiwi closed at A87.50c (A87.48c), 0.4963 euro (0.4907), 54.81 yen (54.85), 0.3111 pence (0.3094) and 0.7291 Swiss francs (0.7193). The Australian dollar eased to $1.1427 from $1.1431.
The 90-day bill yield closed at 5.89 per cent (5.89) and the monetary conditions index tightened to minus 231 (minus 267).
April 2004 bonds closed at 5.76 per cent (5.75), the November 2006 yield fell to 6.16 per cent (6.17), and the November 2011 bond yield was at 6.46 per cent (6.47).
- NZPA
<i>Currency:</i> Kiwi spurts higher
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