Kiwi hits record highs as borrowing costs are eased
The kiwi hits a record high against the euro and a multi-month surge against the greenback after central banks in Europe, England and China ease borrowing costs.
BUSINESSDESK: The New Zealand dollar hit a record-high against the euro and a multi-month surge against the greenback after central banks in Europe, England and China eased borrowing costs on concerns about the global outlook.
The kiwi rose as high as 64.99 euro cents, the highest since the 17-nation currency entered circulation in 2002. It traded at 64.85 euro cents at 8am up from 64.01 cents yesterday at 5pm.
It climbed to a fresh two-month high 80.71 US cents, and traded at 80.35 cents at 8am up from 80.21 cents yesterday.
Europe's shared currency weakened against higher-yielding peers, including the kiw,i after the European Central Bank cut its key interest rate by 25 basis points to a record-low 0.75% and reduced its deposit rate to zero for the first time.
China unexpectedly cut its key interest rate for the second time in a month and the Bank of England raised its asset-purchase target by £50 billion to £375 billion.
"All of this is good stuff for the kiwi against the euro, which has well and truly smashed up to a new high," said Dan Bell, currency strategist at HiFX.
"The New Zealand dollar will continue to rise against the euro and the pound. While we are not firing up all cylinders we are outperforming most developed countries."
"Investors are feeling happier about holding onto New Zealand dollars," Mr Bell said.
The New Zealand dollar increased to 51.73 British pence from 51.43 pence.
Traders will be looking at US employment data overnight, when non-farm payrolls are expected to show the world's biggest economy added 90,000 jobs last month, according to a Reuters survey.
In New Zealand, the government financial statements for the 11 months ended May 31 are due for release this morning.
The kiwi rose to 64.17 yen at 8am from 64.02 yen at 5pm yesterday. The trade weighted index increased to 72.80 from 72.51 yesterday.
Hannah Lynch
Fri, 06 Jul 2012
Fri, 06 Jul 2012
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Kiwi hits record highs as borrowing costs are eased
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