NZ dollar loses ground against surging aussie

The New Zealand dollar's three-week drive higher came to an end today when the Australian dollar took off after better than expected data was released.

The NZ dollar was at US77.61c at 5pm, down from US78c at 8am and up from US77.16c at 4.30pm yesterday.

The Australian dollar surged today after strong jobs data built the case for a policy tightening. Australian employment jumped by 37,800 in March, far exceeding expectations of a 22,000 rise.

The New Zealand dollar could not keep up with the surging Australian dollar and was at A74.20c at 5pm from A74.69c at 8am and A74.40c at the same time yesterday.

"Kiwi suffered on the crosses as people switched back into Australian dollars," said Murray Hindley, chief currency dealer at ANZ.

The NZ dollar faced resistance at US78.10c. It had topped US78c against the greenback for the first time in nine weeks on Wednesday night.

BNZ currency strategist Mike Jones said strong risk appetite and renewed optimism about the global economy has buoyed demand for the carry trade - when investors borrow in low-yielding safe haven currencies such as the yen and invest in higher yielding assets such as the NZ and Australian dollars.

Broad-based yen selling has been behind the NZ dollar's lift against the Japanese currency.

The NZ dollar was at 66.15 yen at 5pm from 65.85 yen at a similar time yesterday. It was at 0.5425 euro from 0.5412 yesterday.

The trade weighted index eased to 67.83 from 68.16 at 8am but was still above 67.64 yesterday.

- NZPA