Currency: NZ dollar ends off session highs

The New Zealand dollar came under a little pressure from profit taking today but still finished above US68c.

Both the Australian and New Zealand dollars experienced some profit-taking ahead of a holiday weekend in Australia and after inflation in China accelerated to a 19-month high in the year to May.

The NZ dollar was at US68.03c at 5pm, down from US68.74c at 8am but up from US67.80c at 5pm yesterday.

It rose on Thursday after the Reserve Bank of New Zealand raised the official cash rate by 25 basis points to 2.75 per cent and after China confirmed exports jumped 48.5 per cent in the 12 months to May, easing concern that Europe's debt woes would hurt the global economy.

Strong equity markets also underpinned high yielding currencies today.

By 8am today the NZ dollar was around a one-week peak against the yen, buying 62.74 yen. It was at 62.26 yen at 5pm from 61.81 yen at the same time yesterday.

ANZ said risk assets were back in favour, with last week's concerns seemingly a thing of the past.

"Equities and commodities performed well and measures of risk aversion have eased, with strong Chinese export growth the latest indicator reassuring investors about the health of the global recovery."

But it also warned that with the global recovery far from assured, more volatility should be expected.

The NZ dollar peaked on Thursday night near 0.5675 euro, its highest level against the European currency in three weeks. By 5pm it was at 0.5619 euro from 0.5627 yesterday.

Against the Australian dollar, the NZ dollar was A80.62c at 5pm from A80.87c at the same time yesterday.

The trade weighted index was 66.35 from 66.86 at 8am and 66.32 at 5pm yesterday.

- NZPA