Good day for NZ dollar

The New Zealand dollar got off to a strong start to the week and commentators are calling the currency higher.

By 5pm today the NZ dollar was buying US74.29c, little changed from US74.33c at 8am, and up from US73.32c at 5pm on Friday.

The NZ dollar made solid gains during the weekend and Westpac expects the bias this week to be upward due to improved sentiment toward risky currencies globally.

BNZ Capital strategist Mike Jones said a combination of the broad-based weakness in the greenback, and renewed optimism about global recovery, pushed the NZ dollar up during the weekend.

The NZ dollar received a small knock back today after Statistics New Zealand reported the producers outputs index fell 1.4 per cent, while the inputs index was down 1.1 per cent in the September quarter.

The data implied less of a need to raise interest rates. Also, a Business New Zealand survey of the service sector showed an upturn in that sector stalled, suggesting the recovery is patchy.

Rankin Treasury said all eyes will be on China this week. The vexed issue of the pegged Chinese yuan is expected to receive coverage in a debate about global economic imbalances.

The NZ dollar was 66.60 yen by 5pm from 66.10 yen at 5pm on Friday and A79.54c from A79.15c on Friday.

The upswing at the weekend took the NZ dollar to 0.4989 euros, the highest level against the European currency in more than two weeks, and at 5pm it was at 0.4967 from 0.4930 on Friday.

The trade weighted index lifted to 66.08 from 65.53.

- NZPA