KEY POINTS:
The New Zealand dollar ended the week near another post-float high as the US dollar continued to lose value.
The rise of the kiwi came as the US dollar plunged below 100 yen for the first time in more than a decade, and hit a record low against the euro as worries deepened on Wall Street that the United States had entered a recession.
The greenback approached parity with the Swiss franc for the first time, gold hit an all-time high and data showing a surprise drop in US retail sales heightened concern that American consumers were cutting back on spending.
The kiwi peaked this morning at US81.85c, according to Reuters data, just three-tenths of a cent down on the post-float high hit late last month. By 4.30pm, it was buying US81.66c, having risen from US80.65c at 5pm yesterday.
The kiwi's rise came as the BNZ today said the New Zealand economy was likely to go into recession, or more likely, was already in one.
In a very gloomy report, BNZ economist Stephen Toplis said New Zealand was in for a prolonged period of low growth and at the same time the Reserve Bank had no room left to cut interest rates.
The NZ dollar also climbed through the night against other currencies but during the day eased back.
Against the Australian dollar it closed on A86.42c against A85.80c yesterday. The Australian dollar's gains against the greenback were relatively muted - ending on US94.46c from US94.08c yesterday.
The trade weighted index closed on 72.434 from 71.66 yesterday.
US dollar selling was triggered by fears that a Carlyle Capital Corp bond fund was near collapse after defaulting on $US16.6 billion ($NZ20.8 billion) of debt, refocusing attention on worsening credit market turmoil.
And a surprise 0.6 percent decline in US retail sales data stoked recession fears even further by suggesting that US consumers were starting to put their wallets away.
"The slowdown that we know is happening in the banks has manifested itself on Main Street. These economic numbers are going to get much worse," said Joe Francomano, vice-president for foreign exchange at Erste Bank in New York.
The historically weak greenback and falling equities triggered a flight to commodity markets, with gold futures hitting a record above $US1000 an ounce and oil reaching an all-time peak at $US111 a barrel.
Soft commodities such as cocoa and coffee also rallied and industrial metals rose but were restrained by fears of a global economic slowdown.
- NZPA
