NZ dollar close to seven week high

The New Zealand dollar retreated a little this afternoon but remained close to its seven-week high as gains on equity markets boosted demand for riskier assets such as the kiwi.

By 5pm, the kiwi was at US65.40c, up from US64.80c late yesterday and about 35 points below its high earlier today.

The kiwi traded between US65.28c and US65.77c today, a dealer said.

"We saw it go up to the highs of the day on the back of the Dow finishing strongly, and we've seen it sold off on the back of a stronger US dollar and also a weaker aussie," he said.

"It's remained reasonably firm today and it will all hinge again tonight on equity markets etc."

Against the aussie, the kiwi gained to A80.51c from A80.30c late yesterday, and it was also firmer against the euro, yen and sterling.

Strong corporate earnings in the United States have prompted investors to plunge back into high-yielding currencies and other risky assets, at the expense of the US dollar.

But the US dollar improved from its lows as the market awaited testimony by Federal Reserve chairman Ben Bernanke, while the yen bounced from a drop in holiday-hit trade.

Traders and analysts said an article in the Wall Street Journal by Mr Bernanke laid out the groundwork that there were not going to be any immediate rate hikes.

Currency rates:

NZ dlr/US dlr US65.40c US64.80c

NZ dlr/Aust dlr A80.51c A80.30c

NZ dlr/euro 0.4605 0.4575

NZ dlr/yen 61.39 61.35

NZ dlr/stg 39.63 39.55

NZ TWI 61.20 60.87

Aust dlr/US dlr 81.20 80.65

Euro/US dlr 1.4199 1.4158

US dlr/yen 93.87 94.68

- NZPA