Dollar finally bursts through US69c

The New Zealand dollar reached one-year highs against the greenback and euro as it finally managed to push through the US69c level.

The kiwi climbed as high as US69.35c overnight in a session affected by the Labor Day holiday in the United States. In the past fortnight the NZ dollar has pushed above US68.90c several times but failed to jump the next hurdle.

The overnight climb happened around 7pm, taking the NZ dollar in a 30-minute burst from US68.80c to above US69.20c, where it stayed for most of the rest of the time until 8am, when it was buying US69.30c.

BNZ Capital senior strategist Danica Hampton said the NZ dollar was one of the strongest performing currencies during the 24 hours to 8am.

Short term speculative players had taken advantage of the holiday-thinned session to gun for the reported option barrier at US69c, she said.

The break above US69c triggered a rush of stop-loss buying, sending the kiwi to its new year-to-date high.

Aside from the action in the NZ dollar, not much was going on in currency markets, Ms Hampton said.

It was worth noting that the recent strength of the NZ dollar had been accompanied by a growing conviction that the New Zealand economy would emerge from recession later this year.

The NZ dollar climbed as high as 0.4837 euro from 0.4801 at 5pm yesterday, and by 8am was at 0.4832.

Against the Australian dollar the kiwi was at A80.96c by 8am from A80.77c at 5pm, while the NZ dollar rose to 64.42 yen from 64.10. The trade weighted index lifted to 63.92 at 8am from 63.55 at 5pm.

- NZPA