NZ dollar closes high

The New Zealand dollar consolidated at higher levels today after surging above US73c against the greenback for the first time in more than three months overnight on Friday.

The NZ dollar peaked around US73.25c and by 5pm today was not far from there at US72.76c, up from US72.48c at 5pm on Friday.

BNZ strategist Mike Jones said the NZ dollar was the strongest performing currency last week.

Confirmation from the Reserve Bank of New Zealand that interest rates were set to rise "over coming months" had spurred a strong appetite for the NZ dollar, particularly against the low yielding euro and yen.

In the coming week the most important data would be the household labour force survey on Thursday, Mr Jones said.

Westpac said it was increasingly bullish about the NZ dollar after the Reserve Bank of New Zealand took a hawkish stance last week and after the currency broke through the US72c level.

The Australian dollar rose today on speculation the Reserve Bank of Australia will raise its benchmark interest rate by 25 basis points to 4.5 per cent tomorrow, particularly after Australia's house price index jumped 4.8 per cent in the first quarter.

The NZ dollar managed to hold its own against its Australian counterpart, trading as high as A79.02c today before easing to A78.76c at 5pm from A77.91c at 5pm on Friday.

The NZ dollar reached a 33-month high around 0.5512 euro today, and by 5pm was 0.5502 from 0.5470 at 5pm on Friday.

The euro rallied during the weekend as expectations that Greece would soon receive emergency aid helped calm investors concerned at how Athens will pay its huge debts. The aid plan was confirmed early today (NZT).

From 68.14 yen at 5pm on Friday, the NZ dollar also climbed towards six-month highs at 69 yen, and was 68.35 yen at today's local close.

The trade-weighted index was 68.00 at 5pm from the 67.62 at 5pm on Friday.

- NZPA