NZ dollar shoots higher

The New Zealand dollar rose to fresh 10-month highs today as the United States dollar continued to trade near 2009 lows.

Dealers said strong rises in milkpowder prices at Fonterra's monthly internet auction helped boost the NZ dollar today.

The NZ dollar rose to US67.50c, the highest since October last year, but was back at US67.20c by 5pm. It was US66.77c at 5pm yesterday.

BNZ Capital senior strategist Danica Hampton said whole milk prices rose an average 25.8 per cent at the auction, helping the NZ dollar's climb this morning.

The Fonterra auction price had been "much more encouraging" than recent ANZ commodity price data.

ANZ also said the auction result was encouraging but said the NZ dollar's "poke above US67c" yesterday lacked a convincing feel about it.

US economic data continues to be mixed.

Attention is turning to unemployment data due in New Zealand on Thursday. According to a poll by Reuters the unemployment rate will rise to 5.6 per cent.

"The action heats up tomorrow with the release of further local June quarter labour market data," ANZ said.

The NZ dollar was buying 0.4665 euro at 5pm from 0.4640 at the same time yesterday, and 63.85 yen from 63.59, while against the Australian dollar it was up to A79.75c from A79.17c. The trade weighted index rose to 62.16 at 5pm from 61.78.

- NZPA