NZ currency: Dollar starts week stronger

The New Zealand dollar rose today after bouncing around during the weekend reflecting movements in the US dollar.

The NZ dollar was US67.35c at 5pm, up from US66.99c at 8am.

The NZ dollar spiked to a fresh 10 month high of US68c on Friday night but then was knocked back toward US67c as the US dollar strengthened against all the major currencies. It was US67.07c at 5pm on Friday.

The US unemployment rate fell in July for the first time in 15 months in the clearest indication yet that the US economy may be turning around, said BNZ.

"In the past, good news has meant the US dollar was sold, as funds shifted out of safe haven dollars," said Rankin Treasury.

"On Friday night traders bought US dollars on good US news, reacting as logic would expect and it is a sign that markets are at last returning to more normal fundamental measures and reacting accordingly," Rankin Treasury said.

While many analysts are predicting the NZ dollar could rise this week, Rankin said importers should be on alert for a fall with a stronger US dollar looking more likely.

BNZ said the real question this week was whether or not this shift to buying US dollars on relatively better US news continued.

Retail sales data on Friday is the main economic indicator out locally this week but the corporate reporting season also gears up and companies' outlook statements will be being closely watched by equity market investors.

The NZ dollar was 65.40 yen from 63.95 yen on Friday and 0.4027 euro from 0.4668 on Friday.

Against the Australian dollar, the NZ dollar rose to A80.15c at 5pm from A79.98c on Friday, while the trade weighted index rose to 62.82 from 62.22.

- NZPA