The New Zealand dollar touched a fresh eight-year high against its transtasman counterpart after an Australian central bank member said the Aussie currency should be lower.
The kiwi hit 95.31 Australian cents over the weekend, its highest level since December 1, 2005. The local currency was trading at 94.61 Australian cents at 8am in Wellington from 94.48 cents at 5pm on Friday.
The New Zealand dollar touched a two-week low of 82.08 US cents over the weekend as investors moved away from riskier assets. It was trading at 82.32 US cents at 8am from 82.11 cents at the New York close and 82.81 cents at 5pm on Friday.
Investors are favouring so-called safe haven assets such as the Japanese yen, Swiss franc, US dollar, US Treasuries and gold and selling riskier assets such as the high-yielding New Zealand dollar and stocks on concern about emerging markets.
The local currency continued its ascent against the Australian dollar after Australian central bank board member Heather Ridout was quoted in the Wall Street Journal on Friday saying the Aussie had not fallen far enough.
"The kiwi/Aussie still looks very buoyant to the upside," said Stuart Ive, senior adviser at OMF, who expects the cross rate may consolidate around 94.50 cents.
Ive said the kiwi is being impacted by an investor "flight to quality".
"People are getting out of their riskier investments which may be stock market shares or a higher yielding currency and they are willing to sacrifice the gains that they could possibly get in there for safety as we enter a relatively uncertain moment in time," he said. "There are still some adjustments taking place in global economies."
The Federal Reserve has its first meeting of the year this week and may continue to taper its US$75 billion a month bond-buying programme. New Zealand's central bank also meets this week, with some traders expecting an interest rate hike.
Australian banks are closed today for Australia Day.
In New Zealand, the Performance Services Index for December is scheduled for release at 10:30am. Auckland has a public holiday.
The New Zealand dollar touched a seven-week low of 83.91 yen over the weekend and was trading at 84.25 yen at 8am from 85.67 yen on Friday.
The kiwi touched a three week low of 59.89 euro cents at the weekend and was trading at 60.19 cents at 8am from 60.50 cents on Friday.
The local currency advanced to 49.94 British pence from 49.77 pence on Friday. The trade-weighted index slipped to 78.11 from 78.42 on Friday.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Chief Justice Elias and hubby Fletcher hit with wet bus ticket over stock in lake
- New Hampshire primaries: Trump, Sanders win by wide margins
- Housing NZ directors get 63% pay hike
- Dividends in focus for NZ earnings season as low interest rates underpin equity demand
- PayPal ‘on shaky ground’ as it pulls service from second Netflix unblocker popular with Kiwis
Most listened to
- Green party co-leader James Shaw and Business NZ's John Carnegie go head-to-head on the ETS review
- Cream Trading CEO Kevin O'Sullivan on why dairy companies might want to sign up to the new trading platform
- Paul Brislen on the merits of "cutting off the money" versus Netflix' technical attempts to shut-out unblockers
- Westpac's Dominick Stephens says dairy prices are still a major concern, despite El Niño fears fading
- London School of Economics Professor John Kay discusses financial regulatory shortcomings