Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.Launch Radio player
BUSINESSDESK: The New Zealand dollar rose against most major currencies as more uncertainty in Europe drew offshore investors to the nation's relatively high yields and economic stability.
The kiwi rose to 82.32 US cents from 81.96 cents at 5pm in Wellington yesterday. The trade-weighted index climbed to 73.28 from 72.95.
The euro weakened after Spain's central bank said the indebted nation's gross domestic product fell this quarter, spurring a selloff in government bonds, underlining the region's debt crisis.
New Zealand interest rates are a standout among strongly-rated nations, with 90-day bank bills trading at 2.67%, compared to 0.106% for US three-month Treasury bills and 0.03% for German six-month bills.
"There's real money coming into the kiwi, possibly in a safe-haven attempt," says Stuart Ive, a currency strategist at HiFX. "From an offshore point of view you've got to be looking at the yield. With all the problems in Europe there has been a flight of money."
The kiwi rose to 79.54 Australian cents, the first time it has broken above 79.50 cents since early April, from 79.14 cents yesterday.
Mr Ive says while Australia and New Zealand are commodity exporters, Australia's shipments of raw materials are hard commodities while New Zealand is a food producer. "The world will still need to eat."
Fonterra yesterday reported a 19% drop in its payout to farmers. Still, annual volumes climbed to 3.94 million tonnes and the Auckland-based company says there has been some recent recovery in prices after they fell to a 34-month low in May.
Traders today will be eyeing the National Bank Business Outlook for September. New Zealand business confidence rose in August, with an increase in construction investment intentions.
The kiwi rose to 63.97 euro cents from 63.65 cents and rose to 50.94 British pence from 50.69 pence. It climbed to 63.93 yen from 63.72 yen.