KEY POINTS:
The New Zealand dollar broke through the US80c barrier in Tokyo trading today.
The currency had traded as high as US79.99c today in New Zealand and then Reuters reported it rose to US80.07c in Tokyo.
It had been threatening the US80c barrier since it hit a fresh 22-year post-float high against the greenback of US79.91c on Saturday. By 8am it was down just slightly on the new peak at US79.81c. It was quoted at US79.88c by 5pm.
ANZ Investment Bank chief dealer Murray Hindley said the currency traded as high as US79.99c in New Zealand today and it was only a matter of time before it went through US80c.
The theme was the same -- a weak US dollar was driving the currency higher. Trading today was actually quite subdued as there were technical problems with the Reuters foreign exchange trading system.
The focus is on the Reserve Bank of New Zealand, which makes a statement about interest rates on Thursday. ANZ said in its briefing today that on balance it expects a hike.
BNZ said its economists also expect a 25 basis point hike to 8.25 per cent because the economy is growing too fast for the RBNZ to be confident that inflation will remain in its target band.
The trade weighted index, which measures the NZ dollar against a basket of currencies, hit a new life high of 76.21 on Friday and closed here at 76.14.
As overseas investors remain keen on carry trades, where they borrow a low interest rate currency such as the yen to invest in higher yielding assets such as the kiwi, the NZ dollar's climb against the Japanese currency also continued.
Early on Saturday the NZ dollar hit a fresh multi-year high of 97.52 yen. By 8am today the kiwi was at 97.32 yen and by 5pm it was 96.66 yen.
Against its Australian counterpart it was quoted at A90.65c from A90.26c on Friday.
Reuters currency rates:
5pm today 4.45pm Friday
NZ dlr/US dlr US79.88c US79.53c
NZ dlr/Aust dlr A90.65c A90.26c
NZ dlr/euro 0.5776 0.5763
NZ dlr/yen 96.66 97.18
NZ dlr/stg 38.82p 38.80p
NZ TWI 76.14 76.00
Australian dollar US88.08c US88.08c
Euro/US dollar 1.3831 1.3796
US dollar/yen 121.01 122.22
- NZPA