NZ Dollar: Kiwi gains on lower US

The New Zealand dollar gained on the greenback, as data showed a sharp decline in the number of Americans filing for initial jobless benefits, easing concern about the United States economy.

By 8am the NZ dollar was buying US62.99c from US62.76c at 5pm yesterday, and also gained on the Australian dollar to A80.43c at the local open from A80.27c.

But the kiwi was down against the European currency to 0.4489 euro at 8am from 0.4515 at the local close, and was little changed against the Japanese currency at 58.55 yen. The trade weighted index was 59.51 at 8am from 59.58 at 5pm.

BNZ Capital senior strategist Danica Hampton said that just when it might have been thought lower levels were in store for the NZ dollar, currencies had traded right back into the middle of very familiar ranges.

An update from the Bank of England spurred a British sterling-led currency recovery in overnight trade, she said.

Sterling rose after the BoE did not increase purchases of financial assets, quelling market fear about a possible rise in British inflation.

Hampton said that looking at the past fortnight, some of the shine had started to come off the NZ dollar against the greenback.

A more sombre and realistic assessment of global growth prospects had seen risk appetites wane, with growth currencies such as the NZ dollar on the back foot at times as a result.

- NZPA