The New Zealand dollar edged higher, touching a new three-month high, as investors largely shrugged off testimony by former US Federal Bureau of Investigation chief James Comey and after the European Central Bank was more upbeat on the regional economy.
The kiwi rose as high as 72.22 US cents, the highest since Feb 28, and was trading at 72.15 cents as at 8am in Wellington from 71.96 cents yesterday. The trade-weighted index gained to 77.53 from 77.32 yesterday.
The US Dollar Index rose and the Chicago Board Options Exchange's Volatility Index, known as Wall Street's fear gauge, eased after former FBI director Comey's testimony to the US Senate intelligence committee wasn't seen as offering overwhelming evidence President Donald Trump attempted to obstruct the course of justice during the investigation into his team's dealings with Russian officials.
Meantime, the ECB dropped its easing bias and upgraded its economic outlook in the latest move by a major central bank towards normalising monetary policy. The kiwi rose to 64.32 euro cents from 63.98 cents yesterday.
"Two of the three major risk events for this week have now passed with no adverse market reaction so focus now turns to the UK election, where the first exit polls will be released from about 9am," Bank of New Zealand currency strategist Jason Wong. "The NZD continues to outperform, while the USD has also been well bid, although currency movements have been modest."
