NZ dollar gains on prospects of Greek deal

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The New Zealand dollar rose against the greenback, after euro zone officials looked closer to reaching agreement on a second bailout pack for Greece, helping lift investors' risk appetite and demand for growth-linked currencies.

At a meeting in Luxembourg, European finance ministers reiterated their commitment to passing a 120 billion euro aid package by mid-July for Greece, which investors took as a positive sign, lifting risk appetites.

On Wall Street, the Standard & Poor's 500 Index rose 0.5 per cent to 1,278.36, while commodity prices rose 0.2 per cent to 335.99 on the Thompson Reuters Jefferies CRB Index, a measure of 19 hard and soft commodities.

That saw a moderate increase demand for growth linked currencies, such as the kiwi and Australian dollar.

Still, the potential for further Greek-related volatility remains as European officials beginning to play hardball with the indebted nation, giving it just over two weeks to approve a range of spending cuts and tax hikes before releasing the next 12 billion euro payment under the current bailout.

That's set again a backdrop of rising social unrest, with the reforms deeply unpopular with Greek voters.

"The Greek people will have to commit to these measures, and that is going to be hard sell," said Alex Sinton, a senior dealer at ANZ New Zealand. "Still, what choice do they have?"

The kiwi recently traded at 80.78 US cents, up from 80.53 cents yesterday, and rose to 69.92 on the trade-weighted index of major trading partners' currencies from 69.88.

It slipped to 76.49 Australian cents from 76.62 cents previously, and climbed to 64.85 yen from 64.54 yen.

It dropped to 56.49 euro cents from 56.68 cents from yesterday, and was little changed at 49.90 pence from 49.92 pence previously.

The government statistician is set to release travel and migration data for May, which Sinton said is unlikely to move the currency but would be closely watched to gauge the impact of the earthquakes on Christchurch.

The kiwi dollar may trade between 80.50 US cents and 81.40 cents, Sinton said, with movements unlikely to break beyond the range.